Saturday, March 10, 2012

Barry, Joe, & Scott Turow

Scott Turow, President of the Big Publishers Club (aka the Authors Guild) just blogged about the Department of Justice lawsuit against legacy publishing’s agency pricing model. I talked about how unfair agency pricing was to Amazon and to authors two years ago. I think I was pretty prescient about the future of ebooks, and of publishing, even if my numbers weren't nearly as optimistic as they could have been.

So now President Turow has written a call to arms, warning writers of the dangers of Amazon and the DoJ. I asked my buddy, bestselling novelist Barry Eisler, if he wanted to join me in commenting on the piece. Barry’s got a good bullshit detector and from time to time we’ve had fun dissecting and exposing obfuscation like Scott’s (see our thoughts on Hachette’s “We are Still Relevant” memo).

Scott's original words are in italics; my and Barry’s reaction follow in plain text.

Here we go...

Yesterday's report that the Justice Department may be near filing an antitrust lawsuit against five large trade book publishers and Apple is grim news for everyone who cherishes a rich literary culture.

Joe: Translation: It will be grim news for bestselling authors and billion-dollar publishers.

Barry: I always wonder what people mean by these vague references to “rich literary culture” (and when I see the same phrase crop up in more than one place, it really sets my bullshit detector tingling). Ordinarily, these buzzwords sound appealing in the abstract, but dissolve like an urban legend when subjected to a bit of thought.

The only books that contribute to a rich literary culture are the ones sold at agency (meaning collusively high) prices by legacy publishers? Or sold through independent bookstores? The publishing establishment must be free to collude on prices or culture will perish? The publishing establishment contributes more to culture than books themselves? The publishing establishment is culture?

That’s Scott’s argument? It’s a strange one.

The Justice Department has been investigating whether those publishers colluded in adopting a new model, pioneered by Apple for its sale of iTunes and apps, for selling e-books. Under that model, Apple simply acts as the publisher's sales agent, with no authority to discount prices.

Joe: Translation: Under the Apple model, publishers can set their own prices. That isn't Amazon's model, but if enough of us band together (i.e. collusion), publishers can force Amazon to accept the prices publishers set.

Look, a retailer should be able to sell whatever they want to sell, for however much they want to charge.

Imagine going to a car dealer and being told, "We have to sell this Mazda for $19,999, and you can't bargain." Imagine owning a store and not being able to put anything on sale.

We have no way of knowing whether publishers colluded in adopting the agency model for e-book pricing. We do know that collusion wasn't necessary: given the chance, any rational publisher would have leapt at Apple's offer and clung to it like a life raft.

Joe: Translation: It could be that publishers didn't collude, but all independently came to the same conclusion and independently presented it to Amazon at the same time with exactly the same terms.

Barry: Like the coincidental lockstep 17.5% digital royalties offered in all legacy publishing contracts. These things just happen sometimes. By accident.

Joe: Could be some sort of hive mind. Or psychic powers. I wonder if the DoJ will believe the "it's-just-random-luck" defense.

Amazon was using e-book discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open.

Joe: Translation: Amazon was using free enterprise to gain market share, something that worries inferior competition.

Barry: Oh, come on. Amazon’s lower prices were intended to “destroy bookselling?” Not to sell more books and gain market share? It’s ipso facto evil to compete via lower prices?

I really wish all companies would collude to charge higher prices. The world would be a better place.

Joe: The Big Publishing Cartel monopolizes distribution for decades and that's fine, but some upstart comes in and starts treating authors and readers with consideration, and it is a call to arms.

Barry: This argument is just bizarre. I mean, Amazon, which sells more books than anyone, is destroying bookselling? Amazon is destroying bookselling by selling tons of books?

Watch the linguistic dodge: Scott is implicitly arguing that the only model that counts as “bookselling” is the current model, built and maintained by legacy publishers and brick-and-mortar stores. That is, “bookselling = physical bookstores. Online bookselling doesn’t count as bookselling.” He’s arguing as though physical booksellers are the only legitimate organisms in the forest, while Amazon is some sort of exotic interloping alien species rampaging through a healthy native ecosystem. This is the only way to make sense of an argument that states, “Amazon is destroying bookselling by selling so many books.”

Why not just state the argument clearly? After all, Scott is former litigator and presumably knows how to write a careful legal brief. He could have said, “Amazon’s low prices were attracting so many customers to online bookselling that brick-and-mortar stores were suffering.” But the reaction to such an argument is much more likely to be, “Well, that’s sad, but it sounds like the way of the world. Like the record stores. I guess you can’t fight technology.” So instead, he wrote, “Amazon is destroying bookselling!” Which sounds evil and scary and is therefore a better call to arms. The problem is, this is a terribly tendentious way to state the argument, and it’s also a contradiction in terms. Maybe Scott would also argue that Apple is destroying computer-selling by selling so many computers, but logically, it’s pretty hard to see how someone could destroy bookselling by selling tons of books. In arguing that bookselling is destroying bookselling, Scott is making his biases as clear as his argument is turbid.

Joe: I love the term uneconomic. A synonym would be "someone else is giving customers what they want."

Just before Amazon introduced the Kindle, it convinced major publishers to break old practices and release books in digital form at the same time they released them as hardcovers.

Joe: Translation: Amazon listened to the thousands of complaints of its customers, who, incidentally, are also the customers of the major publishers.

Barry: “Old practices”? We’re talking about digital books. Amazon only released the Kindle in 2007. Scott makes it sound like windowing -- the practice by which publishers forced people who like digital books to wait for six months following the paper release -- is some sort of august, revered tradition dating back to the glorious dawn of legacy publishing.

But the main thing is, I hate when innovation forces stodgy companies to break old practices. Especially when the old practice prevented people who wanted books from obtaining them instantly, easily, and inexpensively, with unlimited choice.

This might as well read, “Newcomer’s innovation forces legacy player to adapt... bad newcomer! Bad!”

Again, what kind of biases would cause someone to use such misleading language and to adopt such an anti-innovation position?

Then Amazon dropped its bombshell: as it announced the launch of the Kindle, publishers learned that Amazon would be selling countless frontlist e-books at a loss.

Joe: Translation: Amazon was being competitive, while also giving customers what they wanted. Which meant publishers and authors benefited, since they were getting higher royalties from ebooks than paper books.

Prior to the agency model, ebooks were sold to Amazon at 50% of the hardcover price. Authors got 25% of what the publisher received. So Amazon could sell Rain Fall at $4.99, and you'd get $3.12 while your publisher made $9.37. Now Signet sells it at $7.99, and you get $1.39 and Signet only makes $4.19.

And we both know that $4.99 sells more copies than $7.99.

Shame on you, Amazon! How dare you take a loss while authors and publishers make more money!

Barry: Here’s the overall state of play. Amazon identified a lower-cost and otherwise more efficient way to distribute books -- digitally. They developed the Kindle and sold digital titles at a loss to build and accelerate the growth of digital distribution. I don’t think you can call this strategy evil anymore than you can describe as evil legacy’s publishing’s countervailing strategy of trying to retard the growth of digital through high digital prices and delayed digital releases.

But I do think you can call one smart and the other dumb.

Joe: When publishers forced the agency model on Amazon, suddenly Amazon made a profit on each ebook sold.

That's the way to win a war? By arming your enemy? Okay...

This was a game-changer, and not in a good way. Amazon's predatory pricing would shield it from e-book competitors that lacked Amazon's deep pockets.

Joe: Translation: Amazon was trying to gain market share by taking a loss.

Barry: And accelerate the transition to a kind of book distribution that would involve lower costs, lower prices, more books sold, and higher profits. I can understand how this might feel “predatory” to a player tethered to a paper world, just as it probably felt predatory to record stores when music started getting distributed via mp3. Probably customer-centric innovation always feels predatory to any legacy player who for whatever reason isn’t inclined or able to adapt.

Critically, it also undermined the hardcover market that brick-and-mortar stores depend on. It was as if Netflix announced that it would stream new movies the same weekend they opened in theaters. Publishers, though reportedly furious, largely acquiesced. Amazon, after all, already controlled some 75% of the online physical book market.

Joe: Translation: The consumer must consume media the way we want them to, not the way they want to.

Barry: Yes, and the establishment entitlement mentality is clear in his Netflix example, too. Because absent some sort of contractual obligation, so what if Netflix decided it could better serve customers and grow its market share by not forcing customers to watch movies the way movie theaters want them watched? Look, I wouldn’t blame theaters for trying to force a waiting period onto customers who would otherwise just watch the movie at home (though I don’t think fighting your customers is typically a good business model). But I also wouldn’t blame Netflix for adopting a countervailing strategy of giving customers what they want. But Scott is arguing that if Netflix acted to give customers what they want, they would be doing something unfair and illegitimate. In his mind, movie theaters are older, establishment players, and the newcomers of the world, like Netflix, must play by those old establishment rules or else they’re unfairly “undermining” those old establishment businesses. Disrupting, certainly, but “undermining”?

By the way, I bet Blockbuster felt Netflix was totally undermining them with predatory practices when Netflix started distributing movies by mail as part of a subscription service. I'd also bet cable TV companies felt threatened when Netflix began to stream videos. Again, this is just how it typically feels to be on the wrong end of innovation.

Joe: Here's the thing: those "furious" publishers were getting paid! Amazon didn't steal anything from them. Amazon didn't change the contracts it had with them. Amazon chose to take a loss -- a loss that is within their right to decide on, and a loss that gave publishers and authors more money than the agency model. And frightened publishers still tried to stop it, it seems, by colluding.

If Netflix paid James Cameron 10 billion dollars to release Avatar 2 through Netflix, rather than through theaters, how would that be unfair?

Barry: Also, there are so many things wrong with the way paper publishing has traditionally done business (consignment and returns, for example) that it’s a little disingenuous to blame Amazon for “undermining the hardcover market.” The hardcover market, as designed and managed by legacy publishing, had already done a fairly good job of undermining itself.

I imagine when Michael Dell figured out that he could lower costs and prices and provide custom computers direct by phone and website orders, HP complained that he was undermining their network of brick and mortar resellers. Again, this is a natural and probably universal reaction, but that doesn’t make it a logical or desirable one.

I can’t help but smile too at Scott’s acknowledgment that Amazon sells a shitload of paper books through its online store. Same guys who are destroying bookselling. Again, they’re destroying bookselling by selling tons of books? Those devious bastards, I knew they were up to something!

I don’t mean to be hard on Scott and I love his books, but the more I read his arguments, the more I see at work an exceptionally establishment mindset.

Amazon quickly captured the e-book market as well, bringing customers into its proprietary device-and-format walled garden (Sony, the prior e-book device leader, uses the open ePub format).

Joe: Translation: With Amazon’s low pricing, a great ereading device, and a smart online store, people want to shop there.

Two years after it introduced the Kindle, Amazon continued to take losses on a deep list of e-book titles, undercutting hardcover sales of the most popular frontlist titles at its brick and mortar competitors.

Joe: Translation: Amazon took a huge gamble, when no one else in publishing was willing to.

Barry: How dare they sell a lower-priced format that more and more customers prefer compared to the high-priced formats legacy publishers had always forced on them!

It was also totally unfair to record companies when digitization and online music downloads eliminated their ability to force consumers to buy an entire CD instead of the one or two songs consumers wanted.

I know I’m repeating myself, but... the biases behind these arguments are fascinating. And telling.

Joe: I paid $17 for the song Tubthumping because I couldn't get the single. I got knocked down, but I got up again. You're never gonna keep me down.

Barry: Look, you can build a business by forcing your choices on consumers (commonly known as monopoly rents), or you can build one by figuring out what consumers would prefer -- and giving it to them. Consumers like buying books online and they like digital books. You can argue that all such consumers are evil or that they’re morons, but they like what they like, and innovative companies will try to serve them. That’s what's going on here, and legacy players would do better to compete than to complain. They might still lose, but competing would at least be more dignified.

Joe: The whiny dog gets fed. At least it hopes it does. It's much easier to whine for your supper than hunt for it.

Those losses paid huge dividends. By the end of 2009, Amazon held an estimated 90% of the rapidly growing e-book market. Traditional bookstores were shutting down or scaling back. Borders was on its knees. Barnes & Noble had gamely just begun selling its Nook, but it lacked the capital to absorb e-book losses for long.

Joe: Translation: Jeff Bezos's left foot is smarter than everyone at the Big 6 combined, and his right foot has more balls then all of publishing combined.

Amazon created a new market that readers embraced and that the competition was ill-equipped to cope with. That's their crime.

Barry: I don’t mean to sound unsympathetic because it must suck to be part of a long-established business ecosystem suddenly faced with a radically innovative new entrant that has discovered and is aggressively promoting a better way of doing the very business you thought was yours to own. But still... this is just the history of technological disruption in industry. It must have sucked for oral storytellers when Gutenberg invented the printing press. It must have sucked for horse-and-buggy stores when car dealers started opening, too. It must have sucked for telegraph companies when people started using phones instead. It must have sucked for typewriter manufacturers when word-processors became the norm. It must have sucked for record stores when music started being sold online.

Joe: It must have sucked for travel agents when Expedia and Priceline arrived. It must have sucked for writers when...

Oh, wait. Writers are the essential part of this business. Writers are the content providers. Without the content, there is no industry, digital or otherwise.

Funny how Scott seems to be forgetting that.

Enter Steve Jobs. Two years ago January, one month after B&N shipped its first Nook, Jobs introduced Apple's iPad, with its proven iTunes-and-apps agency model for digital content. Five of the largest publishers jumped on with Apple's model, even though it meant those publishers would make less money on every e-book they sold.

Joe: Translation: Authors would also make less money.

Isn't Scott Turow president of the fucking AUTHORS GUILD?

Publishers had no real choice (except the largest, Random House, which could bide its time - it took the leap with the launch of the iPad 2): it was seize the agency model or watch Amazon's discounting destroy their physical distribution chain.

Joe: Translation: "We're going to lose our jobs! Let's break the law!"

Barry: It might be true that they had no choice, in the way it’s true that once you’ve made every mistake possible in a jiu-jitsu match, you have no choice but to tap out. But that doesn’t free you of responsibility for all the things you did that put you in such an untenable position in the first place. Why didn’t big publishing develop online bookstores? Why didn’t big publishing develop digital readers? Why didn’t big publishing pioneer low-cost, instant, anywhere/anytime digital book distribution? Why did they wait until someone else innovated in all these areas, and in others, too?

Joe: It's even worse than that. When the climate started to change, why didn't they dress appropriately for it? If it drops below freezing, you put on a coat and hat. If the sun is blazing, you slap on sunscreen. But publishers seem to have done everything possible to retard change rather than adapt to it.

Barry: Yes, from the way Scott writes it, you’d think legacy publishers are just sweet, good-natured people, minding their business and doing a fine job, when all of a sudden a completely illegitimate shitstorm starts raining down on them from a clear blue sky. This is business, people. It’s supposed to be competitive. If you lie around lazy and complacent, you can’t really complain when someone adaptive and aggressive comes along and eats the lunch you’d long ago started taking for granted.

Joe: So now there is competition from Amazon, and Scott complains it’s unfair. The irony is that authors could easily claim the legacy publishing industry treated them unfairly, and that Amazon is now giving all authors a chance to make money. We had no choice before. We took the table scraps we were offered.

Now we finally have a choice. And the Authors Guild would rather fight it than embrace it.

Bookstores were well along the path to becoming as rare as record stores.

Joe: Translation: Now where am I supposed to buy my Abba LPs and Toto 8-tracks?

Barry: This is actually a good example. Record stores disappeared because people found they preferred buying music online. When enough people prefer one kind of technology to another -- cars over horses for transport, electric lights over candles for everyday lighting, online shopping over brick and mortar, digital books over paper -- the only way to stop it is through some sort of monopolistic power, or collusion. Or government intervention.

Joe: That's something the Big 6, the Authors Guild as headed by Scott, and all the brick-and-mortar booksellers, don't seem to understand.

Amazon isn't to blame. Consumers are to blame. They vote with their wallets. And they aren't voting for you because they found something they like better.

That's why we publicly backed Macmillan when Amazon tried to use its online print book dominance to enforce its preferred e-book sales terms, even though Apple's agency model also meant lower royalties for authors.

Joe: Translation: The Authors Guild is in bed with Big Publishing. Why else would we support writers making less money?

If someone is going to dominate me, I'd prefer the dominator who can make me more cash. That said, the whole "What will happen when Amazon controls the world and creates robots that suck human blood" argument is silly. The Big 6 have been sucking my blood for a decade. We're supposed to fear what Amazon might do, while ignoring the teeth in our necks right now?

Our concern about bookstores isn't rooted in sentiment: bookstores are critical to modern bookselling.

Joe: Translation: Oops, I apparently forgot the part above where I stated Amazon controlled 75% of the physical book market.

Barry: Actually, I would argue that the Authors Guild concern about bookstores is very much rooted in sentiment. “Bookstores are critical to modern bookselling”? This is like arguing the telegraph is critical to modern communication.

As I pointed out above, Scott argues that what’s central to a “rich literary culture” isn’t books, but rather legacy publishers and brick-and-mortar stores. If this isn’t a sentimental concern, I don’t know what is.

Think about this sentiment. It’s built on the premise that what’s central to the religion isn’t the sacraments, but rather the priests. Now, I can understand how, if you feel like you’re one of the priests, you’ll naturally look at the world this way. We all tend to think we’re the indispensable actors in the dramas we take part in. But reality is otherwise. Books (that is, literature) are what’s central to a rich literary culture. Not who sells them. Not how they’re sold. Arguing otherwise is worse than narcissistic and elitist. It’s wrong.

Does this sound familiar? Actual priests reacted in a similar way to the advent of the vernacular bible. Bookstores and reviewers acted this way when Amazon first enabled customer reviews. Customers reviewing books? Unfiltered, unaided? But they might say anything! And what about female suffrage? Women, voting? Are you serious? But don’t they need men to guide them?

As I’ve said elsewhere, “I'm not a historian, but I have a feeling that in every revolution, as a certain class loses its erstwhile power and privileges, there will be people who fear the loss of that class will lead to an erosion of structure, of standards, even of civilization itself.”

Joe: Yet structure, standards, and civilization all still remain. This belief is rooted in existence bias.

Barry: Yes. Sott is sounding very much like one of those fearful people, and his arguments flow from his fear. His sentiments about the critical importance of how books are sold and by whom is just a current example of an establishment mindset reacting to the forces of democratization.

Joe: I've reached many more readers through Amazon than I have through every brick-and-mortar bookstore in the entire world combined. Ebooks don't require a publisher to distribute them. THAT is modern bookselling.

I've also made the case that people who think they love paper books are actually confused. They conflate the story on the printed page with the story in their heads. If you really think paper books are better, would you ever spend time touching, smelling, and objectifying a book with no words in it?

Barry: I don’t know. Personally, I’m happy with whatever way people want to read books -- paper, digital, stone tablets, audio...

Joe: You're biased about audio, because you perform your own audiobooks. And you owe me $50 for linking to them.

Barry: I love listening to audiobooks! But I love doing the narration myself, too.

Anyway, as long as people read literature, I think we’ll enjoy a rich literary culture. By comparison, where, how, and from whom they buy their books doesn’t strike me as particularly important.

Joe: I like bookstores. But I also like surfing Amazon; reading the customer reviews, clicking on the suggestions Amazon gives me (which are often amazingly on-target), flipping through samples. However, both are a means to an end. I'm looking for something to buy. It’s ultimately about destination value versus journey value.

Marketing studies consistently show that readers are far more adventurous in their choice of books when in a bookstore than when shopping online. In bookstores, readers are open to trying new genres and new authors: it's by far the best way for new works to be discovered.

Joe: Translation: But I won't share these studies with you, or tell you who funded them. Also, anyone who surfs Amazon for books is apparently a coward and a moron who can't find anything to read.

Barry: Yeah, that was a weird argument. Online, readers aren’t open to trying new genres and authors? That hasn’t been my experience, but maybe I’m atypical. And I would love a few cites to those “by far” studies he says he’s relying on.

But look, even if in Scott’s mind brick-and-mortar stores are somehow better than online shopping, this doesn’t change the fact that readers increasingly prefer online shopping. I love brick-and-mortar stores (though I’ve visited so many on book tours I sometimes have flashbacks when I go inside) and I’ll be sad if they die out, but you can’t fight customer preferences. Well, you can, but again only via monopoly power or by getting the government to intervene. If consumers are left to their own devices, they just seem increasingly to prefer online shopping.

This isn’t to say nothing will be lost if brick-and-mortar stores go away. Something is always lost when a new technology or system replaces an old one. Something was lost when oral storytelling was replaced by writing; when typewriting replaced penmanship; when phone calls replaced letters; when cars replaced horse-drawn carriages. But this is the way of the world. You can fight it, or try to adapt.

Publishing shouldn't have to choose between bricks and clicks.

Joe: Translation: Publishing wants to sell paper books, because it controls the paper market. Now that Amazon controls the ebook market, publishing is scared shitless.

Barry: See how Scott’s piece is really about publishing, not about authors or readers? Because readers are choosing between bricks and clicks. So what does it mean that publishers shouldn’t have to? Publishers shouldn’t have to go in a direction dictated by end-user customers? Why shouldn’t they? Scott is arguing that publishers shouldn’t have to run their businesses based on what end-user customers want. Why not? What logic can we invoke that might create some special dispensation for publishers from the laws of business physics? It just doesn’t make sense -- except by resort to the kind of sentiment Scott claims isn’t part of his position.

I have to say, it’s odd to see such a legacy publishing-centric article written by the president of something called The Authors Guild. I know you could try to make a “What’s good for legacy publishing is good for authors” argument, and that is what Scott is implicitly doing, but still. The logic and connection are pretty strained.

Joe: Has any business succeeded by punishing the consumer? DRM, high prices, windowing, long lag times from manuscript completion to market, restriction of new works (aka the lovely non-compete clause), all seem to show disdain for readers.

But at least legacy publishers make up for that by treating writers so well.

A robust book marketplace demands both bookstore showrooms to properly display new titles and online distribution for the convenience of customers. Apple thrives on this very model: a strong retail presence to display its high-touch products coupled with vigorous online distribution. While bookstores close, Apple has been busy opening more than 300 stores.

Joe: Translation: Apple is really smart, so publishers just did what Apple said. They were just following orders when they broke the law and colluded, because they didn't think a company as smart as Apple would get in trouble with the DoJ.

Barry: This is just silly. “Apple sells electronics through brick-and-mortar stores and an online store, so books have to be sold the same way”?

What does Apple selling electronics have to do with booksellers selling books? You could as easily point to Amazon, which has only an online store and sells more books than anyone (though there are rumors they’re going to experiment with brick-and-mortar). Or to groceries, which are generally available only in brick-and-mortar. Saying, “Hey, computers are sold effectively this way, so books should be, too,” is just not a sensible argument for anything.

And by the way, a huge portion of Apple’s business is only available online. They’ve sold over 25 billion apps, and not one of them through a brick-and-mortar store. They’re the world’s biggest music seller -- also not available in brick-and-mortar. By Scott’s logic, Apple better start selling apps and music in its brick-and-mortar stores -- a robust marketplace demands it!

Speaking of which, that language is interesting. Scott says “a robust marketplace” is what demands online and brick-and-mortar bookstores. I think what he’s doing is avoiding the real demand that’s out there -- consumer demand for lower-priced digital books, sold online. I don’t know what marketplace he’s invoking, but consumer demand is the only market that really matters.

If you doubt me, take it from Scott. He himself points out that “While bookstores close, Apple has been busy opening more than 300 stores.” Indeed, Apple stores are opening and bookstores are closing, most likely because of the nature of the market for each. If the market demanded otherwise, as Scott would have you believe, you’d have a different result.

For those of us who have been fortunate enough to become familiar to large numbers of readers, the disappearance of bookstores is deeply troubling, but it will have little effect on our sales or incomes. Like rock bands from the pre-Napster era, established authors can still draw a crowd, if not to a stadium, at least to a virtual shopping cart.

Joe: Translation: I'm rich, bitches!

I like how Scott seems to be lamenting the pre-Napster era. It underlines his ridiculous views about piracy and how he obviously pines for the days of old.

Hey, Scott? Napster revolutionized the music industry. More people than ever have more access to more music because of downloads and file-sharing. In part because of Napster, a computer company (one you seem to venerate) has become the biggest seller of music in the world.

Trying to fight piracy is like building sand castles to stop the tide. The Internet was created to share information. You can't police ones and zeros. Nor can you charge as much for them as a tangible paper product that is printed, shipped, returned, shipped again, returned again, and ultimately discounted without the author making a dime.

But what I really despise about this paragraph is the thinly veiled argument of, "I'm not going to be affected because I'm a name brand, but all of you who don't make as much as I do had better beware, because if bookstores go away you'll never be rich like me."

Seriously? Once bookstores disappear, people will only read name-brand bestsellers?

Actually, the opposite is happening. Scott should check some Kindle bestseller lists and see how many indies are outselling him.

Barry: This is another argument I don’t understand. Branded authors will always be in a better position than newbies -- it’s why any smart author will work hard to develop her brand. But what is Scott’s evidence that the existence of brick-and-mortar stores somehow levels the playing field between branded and new authors? You’ve argued convincingly the opposite: that it’s digital that creates a more level playing field because digital distribution is open to all authors, while airport kiosks, for example, will only hold so many copies, and the slots go to the big brand names. For example, James Patterson’s sales dwarf yours in paper, but for various titles in digital, you’re neck and neck.

Joe: Patterson is ahead of me, but I'll hit 1,000,000 ebook sales pretty soon.

Barry: At times Scott’s piece really reads like, “Hey you new authors, pay no attention to the man behind the curtain! You should just listen to my bromides and be very afraid of a future not governed by the current publishing establishment!” I wonder if, as a strongly branded author, he senses that ubiquitous digital distribution will erode the advantage he currently enjoys, and this sense could be affecting the way he views changes in publishing? We’re all human, and where we stand depends at least in part on where we sit. And maybe he’s grateful to, and attached to, the system through which he became a star and of which he’s now a part.

But regardless, arguing that in an online world, branded authors will crowd out newbies worse than is the case is paper is belied not only by common sense, but also by empirical evidence. For example, in science fiction, of the top 200 Amazon books, 154 were self-published. Why doesn’t Scott address this real-world data? Why argue as though no data even exists?

For new authors, however, a difficult profession is poised to become much more difficult. The high royalties of direct publishing, for most, are more than offset by drastically smaller markets.

Joe: Translation: I don't read Konrath's blog. If I did, I'd understand how many authors who couldn't thrive in the legacy system are now putting food on their tables with the money they make from their books.

Barry: This is another one that just makes no sense. It sounds sort of appealing when you first hear it, but then you realize it’s gobbledygook. Like when Dick Cheney said at Gerald Ford’s funeral, “He knew there was no healing without pardon.”

No healing without pardon?! There’s no healing without justice, dude. Pardon the guilty and you’ll never have healing. It’s crazy.

Joe: You always digress to politics.

Barry: Digression? I think not! :)

Anyway, what smaller markets is he talking about? Online bookselling is a smaller market than brick-and-mortar? But Amazon is the biggest bookseller in the world. The online market is bigger already, and still growing, even as brick-and-mortar stores close. And the profession of writing is going to get more difficult for new authors without gatekeepers? That’s completely backward.

Joe: The Guild represents authors' interests... those authors who earn large interests on their bank accounts.


And publishers won't risk capital where there's no reasonable prospect for reward. They will necessarily focus their capital on what works in an online environment: familiar works by familiar authors.

Joe: Translation: I truly believe my $12.99 ebooks are going to sell as well as my paper books once paper goes the way of vinyl records.

We authors need the many, many services publishers provide in order to effectively convey our messages so we can become brand names like Scott. We need to be micro-managed. We can't get decent editing, or a good cover, without a publisher. We certainly will never reach readers. We're lost without a firm, guiding hand that decides to cut our profits by switching to the agency model, that decides to grab erights even though our contracts never gave permission, that pays us twice a year with an accounting system so archaic it makes the bow and arrow look modern.

And apparently we need the Authors Guild to remind us how helpless and needy we are. Thanks for empowering writers, AG, and showing us that the best way to earn a living during this dramatic period of change is to suck it up, tighten our belts, and put all our faith in the Big 6 as they continue to piss down our backs and call it gentle summer rain.

Barry: Yeah, this is yet another one that just makes no sense. Readers only try unfamiliar works in brick-and-mortar stores, not online? Even when those online books are priced at under three dollars, sometimes under one dollar? Where is the evidence for this astonishingly counter-intuitive proposition? Why doesn’t Scott present it?

Does Scott really believe that traditional publishing gatekeepers are currently expanding reader choice, not restricting it? You could argue that restriction is good, that readers need legacy publishers to act as taste-makers. I wouldn’t agree, but the argument is at least coherent. But choice would be further restricted in an online world? Come on. That’s practically parody, like a network executive admonishing, “Don’t watch anything on YouTube, kids, there’s far less choice there! Let us choose for you, that’s what choice really means."

Joe: War is peace! Ignorance is strength!

Two years after the agency model came to bookselling, Amazon is losing its chokehold on the e-book market: its share has fallen from about 90% to roughly 60%. Customers are benefiting from the surprisingly innovative e-readers Barnes & Noble's investments have delivered, including a tablet device that beat Amazon to the market by fully twelve months.

Joe: Translation: See? It's okay that publishers may have broken the law, because they're getting what they want.

I love the term "chokehold", by the way. Amazon has a chokehold on the industry it created and nurtured.

Barry: Yeah, you can tell a lot about biases from the language people deploy. The other one I noticed was “bombshell.” Amazon, bombing and choking its way to predatory market dominance!

Joe: And blazing their path of destruction by treating readers and writers better! Those bastards!

Barry: By the way, I just want to add parenthetically that I hate when people say “12 months” instead of a year, or “36 months” instead of three years, or whatever. Doing so is intended to convey some veneer of precision, either where precision isn’t important or where it doesn’t exist, and it always sets off my bullshit detector. When people are being honest with you, they address you in plain English. When they use weird circumlocutions, you’re being bullshitted.

Joe: Hey, I gotta step away for 300 seconds. Be right back.

Barry: Anyway, I think it’s awesome that Amazon is facing real competition and I hope the competition will intensify. As I’ve said many times, the legacy publishing industry is sick, and when someone is sick, you don’t want him to die; you want him to get better. But I think it bears mentioning that if Amazon weren’t aggressively innovating, none of the players Scott salutes would be moving at all, or at least not nearly as fast. Competition is good. Amazon is causing it, and it’s nice to see other players reacting, if only as resentful and reluctant catch-up.

Brick-and-mortar bookstores are starting to compete through their partnership with Google, so loyal customers can buy e-books from them at the same price as they would from Amazon.

Joe: Translation: I don't understand what an epic fail Google Books is.

Has any author or bookstore made any significant money via Google Books? Seriously, if someone reading this has, or can point me to an article, let me know. Why state that bookstores are starting to compete if there isn't any evidence to support it?

And didn't the Authors Guild just sue Google for something? Is Google the good guy now?

Direct-selling authors have also benefited, as Amazon more than doubled its royalty rates in the face of competition.

Joe: What he somehow forgets to say is, the Big 6 didn't change their royalties, let alone double them. Their royalties still suck. But apparently that's okay.

Barry: I have to say, when the president of the Authors Guild praises competition for getting Amazon to offer self-published authors 70% and says nothing about legacy publishers all (coincidentally) continuing to offer only 17.5%, it’s a little... weird.

Let's hope the reports are wrong, or that the Justice Department reconsiders. The irony bites hard: our government may be on the verge of killing real competition in order to save the appearance of competition.

Joe: Translation: I'm very happy being a rich and famous author. I want it to stay that way and I believe Amazon threatens that.

And seriously, the Big 6 represent “real competition?” Where have they ever innovated? Where have they ever raised the bar? All I see is price fixing and royalty fixing. And so, apparently, does the DoJ.

"The Big 6 represents real competition." How does someone say something like that with a straight face?

Barry: Well, they say the GOP is the party of small government, too.

Joe: I think it’s time for that Orwell reference again: Ignorance is strength!

This would be tragic for all of us who value books, and the culture they support.

Joe: Translation: There are tens of thousands of authors making more money than they ever have in the history of humankind, and the Authors Guild won't even allow them membership because they don't meet their guidelines. Consumers are reading and buying more books than ever before. But this doesn't count, because the money isn't flowing where the establishment wants it to flow. But since I can't use numbers, facts, or logic to persuade, I'll try the emotional appeal. Hopefully no one will make fun of me.

Barry: Again, the conflation: without legacy publishers and brick-and-mortar stores, books and the culture they support will disappear!

Seriously, I’m starting to feel the way I did when Tom Ridge was manipulating the terrorism color codes and John Ashcroft was telling me to stock up on plastic sheeting and duct tape. Be afraid, people. Legacy publishing and books are one and the same. As goes the former, so goes the latter.

Joe: You digressed into politics again.

Barry: Heh. The dynamics are the same. And this attitude is in no way new. It’s just a recent coinage of “L’etat, c’est moi.” And, of course, “Apres moi, le deluge.”

Joe: People accuse me of shilling for Amazon, because Amazon is making me a lot of money. But here's something my critics keep missing: what I'm saying makes sense. And I have experience, examples, numbers, facts, and logic to support my position.

Now, Scott of course similarly can be accused of shilling for the Big 6, because they made him rich. Brick-and-mortar stores also added to his considerable wealth. But that’s not what matters. What matters is, his logic is bad, he's ill-informed, and he's the President of the freaking Authors Guild, which is supposed to represent authors, not publishers.

Does he really not understand, or not care, that Amazon is putting money in authors' pockets? Does he not see the flip side of this coin? Or does he just want to trick his peers into buying this bullshit?

Barry: I don’t know the the Authors Guild well, and I imagine they do various good things for authors. But when I read things like Scott’s piece (and the stunningly whiny and wrongheaded post someone did on the Authors Guild website a few weeks ago about how mean Amazon is), I start to suspect that while they might represent authors’ interests, what they really represent is those interests consistent with the interests of the larger publishing establishment with which the Authors Guild identifies and of which it is a part. That’s okay, as far as it goes, but I think it’s best for authors to have an accurate idea of just how, and how far, the Authors Guild actually represents their interests, and through what kind of a prism it views the world of publishing.

Joe: Beware any organization that’s more concerned about its Top 2% than its Bottom 98%. Beware any organization that is more concerned about its own survival than it is about solving the problems it was created to solve, or serving the people it was created to serve.

But most of all, beware any organization that can't argue based on facts, numbers, and logic, and that has to try to sway opinion with buzzwords and emotion, instead.

President Turow didn't say anything substantive here.

But what he didn't say speaks volumes.

Barry: Do you think he’ll respond to this? After all, we were courteous enough to respond to him.

Joe: Sure he will. Right after he leads the Authors Guild into forcing Big Publishing to raise ebook royalties to what Amazon pays.

Barry: Now that would be an Authors Guild worthy of the name!

But yeah, I’m not hopeful. After all, we’re just authors, not big publishing executives. But Scott, if you do respond, I think it would be helpful to explain why, in the entirety of your defense of the publishing system as currently constituted, you didn’t once mention legacy publishing’s lockstep 17.5% digital royalty rate or its lockstep refusal to include digital escalators equivalent to paper ones. Do you think 17.5% is fair, desirable, and acceptable? If not, what have you been doing to change it, and why have you thus far been unsuccessful?

Joe: Scott, I'd like to know why you and the Authors Guild are so concerned about protecting the status quo players, who offer us only 17.5% royalties, from an entity who offers us 70% royalties.

Barry: And for anyone who shares our concerns, why not tweet a link to this article to Scott’s attention at @ScottTurow? Maybe we can actually get his attention and an explanation. I love those forces of democratization!

Joe: BTW, I just noticed that David Gaughran wrote an excellent response to Scott’s letter -- see Scott Turow: Wrong About Everything.

To wrap this up, this is an email that author Suzanne White sent to the Authors Guild after their last bit of nonsense chastising Amazon. Suzanne also sent it to me, and I asked if I could post it here.

Suzanne: It's unfortunate that an entity which professes to be an "Authors Guild" doesn't work for authors. It works instead for the publishing industry. It works to try to protect what is obsolete.

Authors today can go to Amazon with books they have written, post them on Kindle or develop paperbacks with Createspace or seek to actually be published by Amazon... and get a 70% royalty on their sales. Do you encourage them? Do you help them to understand how they can gain their freedom? Do you applaud those courageous authors who self publish, sell on Kindle and make a living? No you do not. Instead, you warble on, lamenting the fact Bezos is taking over the crusty publishing industry. DUH!


Where in the traditional publishing industry can an author command 70%? Where can an author have utter dominion over cover art? Formatting? Content? Illustrations? Impact? Marketing? The answer is Amazon. And a little bit Pubit and sometimes Smashwords or Apple as well. Where in the standard publishing industry can an author revive a book that he or she wrote in 1982, sold to a publisher who printed it, didn't sell very many and took it right off the market? Amazon, that's where. Author gets rights back, re-formats the book, slams it up for sale on Kindle and in six months is making money with that book.

Where? Tell me. Where can an author do better?

Why does a Guild for Authors rail on about monopolies and decry the demise of old-fashioned publishing as we knew it? Dinosaurs still prowling the streets of Manhattan want their good old boy industry back. Give it up already.

I have been an author for 37 years. I have had agents and publishers up to here. Most authors are, like myself, fed up with the good old boys. Publishers pay gigantic overhead for prime real estate offices and switchboards and secretaries and senior editors and junior editors and cafeterias and fancy seduction lunches for unsuspecting newbie authors and deign give 10 lousy % to an author? Agents? They don't work for authors either. They flog your book, take their % and when you get into a dispute with a publisher, agents crawl under the couch.

Is our Authors Guild really just an arm of the Publishers Guild? We authors who want to retain digital rights so we can sell our books directly are discouraged from even trying. "Don't self-publish. You might explode." You warn. "Get an industry standard, agency acceptable royalty."

You guys! Help authors reach their potential. Stop going to bat for the big guys. It's over boys. Move on out. Don't blame Bezos. Blame history. Ebooks are the future. Young people today grew up on screens. They don't know any other way. Can you really imagine you might convince the young to return to paper? It's Farenheit 451 in reverse. We are burning the books -- not because they contain information deleterious to society, but because they are unwieldy and wasteful. Yes, you can spill coffee on a paper book and it won't lose battery power. But if I pour my coffee on my Kindle and it seizes up, I call Amazon and they tell me how to restore it to its spiffy old self and they return all my books to me presto because they have stored them for me on their computers. I cannot take my coffee-stained copy of War and Peace back to the bookstore and ask for it to be replaced. No way.

I, for one, am content to have rigorously retained all my electronic rights. From the beginning in 1975. Thanks to digital rights, I now make a living from my books - which is more than I can say for all the years I was indentured to Simon and Shoestring.

Ciao Publishers. Ciao Agents. Ciao slavery.

Suzanne White