Tuesday, May 27, 2014

Amazon Speaks

(Now with three addendums! See the bottom of the post.)

The Amazon Books team says:

(AMAZON OFFICIAL)

We are currently buying less (print) inventory and "safety stock" on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future. Instead, customers can order new titles when their publication date arrives. For titles with no stock on hand, customers can still place an order at which time we order the inventory from Hachette -- availability on those titles is dependent on how long it takes Hachette to fill the orders we place. Once the inventory arrives, we ship it to the customer promptly. These changes are related to the contract and terms between Hachette and Amazon.

At Amazon, we do business with more than 70,000 suppliers, including thousands of publishers. One of our important suppliers is Hachette, which is part of a $10 billion media conglomerate. Unfortunately, despite much work from both sides, we have been unable to reach mutually-acceptable agreement on terms. Hachette has operated in good faith and we admire the company and its executives. Nevertheless, the two companies have so far failed to find a solution. Even more unfortunate, though we remain hopeful and are working hard to come to a resolution as soon as possible, we are not optimistic that this will be resolved soon.

Negotiating with suppliers for equitable terms and making stocking and assortment decisions based on those terms is one of a bookseller's, or any retailer's, most important jobs. Suppliers get to decide the terms under which they are willing to sell to a retailer. It's reciprocally the right of a retailer to determine whether the terms on offer are acceptable and to stock items accordingly. A retailer can feature a supplier's items in its advertising and promotional circulars, "stack it high" in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all, and bookstores and other retailers do these every day. When we negotiate with suppliers, we are doing so on behalf of customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term.

A word about proportion: this business interruption affects a small percentage of Amazon's demand-weighted units. If you order 1,000 items from Amazon, 989 will be unaffected by this interruption. If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors.

We also take seriously the impact it has when, however infrequently, such a business interruption affects authors. We've offered to Hachette to fund 50% of an author pool - to be allocated by Hachette - to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%. We did this with the publisher Macmillan some years ago. We hope Hachette takes us up on it.

This topic has generated a variety of coverage, presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product. Some of the coverage has expressed a relatively narrow point of view. Here is one post that offers a wider perspective.

http://www.thecockeyedpessimist.blogspot.com/2014/05/whos-afraid-of-amazoncom.html

Thank you.

Joe sez: I'm surprised that Amazon decided to release a statement, since they rarely do. And I'm tickled by what they said.

They haven't stated that Hachette is pushing for the agency model (I believe William Ockham is correct and Hachette is pushing for that), but apparently negotiations won't be resolved soon.

Amazon is encouraging its customers to buy Hachette titles from third-party sellers, or a competitor. That kind of invalidates the whole "Amazon is a monopoly trying to ruin competition and must be stopped by the DoJ" debate. Since Hachette books are available for pre-order elsewhere, and since Amazon doesn't have a league of enforcers preventing people from buying Hachette books elsewhere (Amazon is even encouraging it), I can't see how the anyone can still make that silly argument.

As for the authors being harmed by these negotiations?

Amazon is willing to help them through these hard times by paying them... if Hachette kicks in half.

Apparently Amazon made this offer to Macmillan two years ago. Since this is the first I've ever heard of it (Amazon rarely makes public statements) I can only assume that Macmillan DIDN'T take Amazon up on that offer. And my assumption is solid, because I know several Macmillan authors, and none of them got any sort of bonus check.

How embarrassing for Macmillan. Their authors, and the public media, were vocal about at the injustice of having the buy buttons taken away by Amazon when Macmillan tried to force Amazon to raise ebook prices.
Maybe those authors should be wondering why the their publisher, Macmillan, didn't help assuage their pain. (actually, I was wrong about this. see addendum #2 below)

Hachette now has this offer on the table. Regardless of the negotiation, Hachette can ease their authors' financial woes by contributing to a fund to help them.

Does Hachette care about its authors?

We'll see...

I'm also eager to hear what Scott Turow, James Patterson, Lilith Saintcrow, and Charlie Stross have to say about this.

Addendum #1

Here's the data that Author Earnings gathered about Hachette titles. Must read.

Addendum #2

Apparently I spoke too soon about Macmillan, and I'm wrong. Someone in the comments posted a link stating that Macmillan and Amazon did indeed pay authors a bonus.

http://www.mhpbooks.com/amazon-macmillan-pay-authors-for-books-that-were-never-sold/

For the link lazy:

In a letter to authors accompanying Macmillan royalty statements, CEO John Sargent has two surprising announcements: one, that many authors will be paid at a higher royalty rate than the company is contractually obligated to pay — 25% of net receipts, instead of 15% of list price. And, second, that the company has decided to pay royalties on sales that were lost during the infamous Amazon “buy button” fiasco. According to Sargent, “We believe it was not fair that authors should suffer from the Amazon buy button takedown imposed on us for a week last year when we switched over to the agency model. So we estimated as best we could what Kindle sales would have been for that week and processed the royalties on those sales as if they had happened.” The payment is tactfully being called an “Amazon Kindle Outage Adjustment.”

What’s even more surprising — indeed, almost impossible to believe — Amazon has agreed to split the cost of these royalty adjustments.

Elsewhere in the letter, which is worth reading in its entirety, Sargent takes credit for fostering much of the health and expansion of the e-book market over the last year. “Since we moved to the agency model,” he writes, “Apple has entered the market, Barnes and Noble has increased its investment in the business, and independent booksellers, working with Google, are now selling your books competitively in the electronic book market.”

Joe sez: I do remember that letter Sargent sent to authors, asking them to opt-in to the 25% royalty rate. I remember a peer not signing it because, if memory serves, it included some one-sided provisions in exchange for the increase from 15% to 25%.

Here's an archive of the letter. If anyone has a copy of the contract amendment they'd like to share, or any proof that they actually got paid by Macmillan/Amazon, please contact me.

If you missed me saying it earlier, I was wrong. I'd still like to get more data confirming that, but if Amazon and Macmillan did compensate authors, I leaped to a lazy conclusion in my haste to chastise a publisher, and I apologize for that and am grateful someone corrected me. Good going, Macmillan, for taking care of your authors.

And for those who are curious, crow sort of tastes like chicken. Humble chicken. I don't have a problem admitting when I'm wrong.

Addendum #3

Hachette has responded:

It is good to see Amazon acknowledge that its business decisions significantly affect authors’ lives. For reasons of their own, Amazon has limited its customers’ ability to buy more than 5,000 Hachette titles.

Authors, with whom we at Hachette have been partners for nearly two centuries, engage in a complex and difficult mission to communicate with readers. In addition to royalties, they are concerned with audience, career, culture, education, art, entertainment, and connection. By preventing its customers from connecting with these authors’ books, Amazon indicates that it considers books to be like any other consumer good. They are not.

We will spare no effort to resume normal business relations with Amazon—which has been a great partner for years—but under terms that value appropriately for the years ahead the author’s unique role in creating books, and the publisher’s role in editing, marketing, and distributing them, at the same time that it recognizes Amazon’s importance as a retailer and innovator. Once we have reached such an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate.

In the meantime, we are extremely grateful for the spontaneous outpouring of support we have received both privately and publicly from authors and agents. We will continue to communicate with them promptly as this situation develops.

Joe sez: Hachette, the fourth largest book publisher in the United States, is owned by French media group Lagardere. Its CEO Arnaud Nourry said on Wednesday he hopes for an early end to the dispute, adding that it should not affect online sales this year.

(thanks to Dan DeWitt for that above link)

So what do we know and what can we guess?

Know: Amazon and Hachette cannot agree on terms.

Guess: This is about money, specifically pricing, specifically Hachette wanting the agency model.

Know: Amazon doesn't see this ending early.

Know: This is definitely hurting Hachette sales on Amazon, as evidenced by the Author Earnings report.

Know: Amazon offered to fund 50% an author pool, to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%.

Know: Amazon did this previously, with Macmillan authors, during their disagreement on terms.

Guess: Macmillan authors got that money (the ones I have been in tough with, or who have commented on this blog, can't remember),

Know: Hachette is lying when it stated "By preventing its customers from connecting with these authors’ books..." Amazon is not a monopoly or monopsony. It doesn't have the power to prevent book sales, and on Amazon.com third party sellers are selling Hachette books, as is Amazon.

Know: Hachette has Special Snowflake Syndrome, thinking books aren't like other consumer good and should be given special treatment because, well, because they said so. (Technically they aren't. Goods like food and fuel and clothing are necessary for life, whereas books are not.)

Know: Hachette are currently not agreeing to Amazon't author fund idea, but will discuss it after an agreement is reached.

Know: CEO Arnaud Nourry believes this dispute won't affect Hachette online sales.

So it seems like there is no bullying by Amazon, just plain old negotiation, which is completely legal.

It seems Amazon is willing to help authors with lost royalties, and at the moment Hachette is not.

It seems that Hachette isn't concerned about lost online sales.

Prediction: Amazon will remove Hachette buy buttons from its store, as it did with Macmillan. Hachette authors, who should be angry at their publisher, will stay angry with Amazon due to Stockholm Syndrome and situational stupidity. Hachette will whine about it, and eventually accept Amazon's terms. And this whole negotiation will have been about the agency model.

Or maybe I'm wrong. Maybe Amazon is trying to cut Hachette profits in half, even as it offers to help authors. Maybe Amazon will start feeling bad and return the pre order buttons. Maybe Amazon will realize books are a different commodity, as important as food, shelter, and love, and by not agreeing to Hachette's terms they are destroying culture.

Maybe.

171 comments:

Alixjune said...

Jeff Bezos is still the smartest guy in the room. :) All the Hachette authors who yesterday were singing the company's praises are now going to be asking their editors, "Hey, where's my check from the Amazon fund you were supposed to contribute to?"

William Ockham said...

That is the classiest declaration of all-out war. Ever. Read that and imagine you are a Hachette exec. Warning, I'm not responsible if you soil yourself. Amazon says:

Hey, you know all that stuff that Hachette's buddies in the press have accused us of? Yeah, we did that. It's just business. We will keep on doing it until we get terms we can live with. By the way, Hachette, we're just not that in to you. If you decide to take your marbles and go home, we can live with that. But we figure that eventually you will come to your senses, but take all the time you need. We can afford to wait. It is ok with us if our customers go somewhere else to buy your products. Let's see how many do.

Oh, and one more thing. If you are so worried about authors, put your money where your mouth is.

Joe Konrath said...

If you are so worried about authors, put your money where your mouth is.

I will admit to inappropriate giddiness at this prospect.

I so want Amazon to put millions of dollars into an author fund and ask Hachette to match it.

When I was with legacy publishers, I would have rejoiced at this possibility. I won't get hurt by negotiations because Amazon will kick money into a fund? Really? That's awesome! Because I'm SURE my publisher (the one who curates and nurtures and supports me, always keeping my best interests in mind) will match that figure.

Right?

They will, right?

Anonymous said...

And in other news, underwear sales in NY are up 400% today.

Jennifer Oberth said...

Can't wait to read Hachette's response to this - whether in a public statement or directly to their authors. What could they possibly say to get around not contributing the money? Not that I'm automatically assuming they won't. (Okay, I am.)

Joe Konrath said...

And in other news, underwear sales in NY are up 400% today.

And high-fives only had a slight 2% increase in Seattle, attributed to the fact that Zon employees tend score "Fonzi" on the Cool Scale.

Jude Hardin said...

A retailer can feature a supplier's items in its advertising and promotional circulars, "stack it high" in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all, and bookstores and other retailers do these every day.

Sounds to me that at least part of the negotiation is about the cost of co-op placement, which brings up a separate but important issue where self-published authors are concerned. Since indies aren't offered that sort of placement, and since most indie authors couldn't afford it even if they were offered it, the playing field really isn't level at all.

Visibility is everything. It's everything in the brick and mortar world, and it's everything in the online world.

It's extremely difficult already, and I have a feeling it's going to get harder and harder for self-published authors to get the kind of visibility it takes to make a go of it. Maybe we can find an answer. I hope so.

Joe Konrath said...

Since indies aren't offered that sort of placement

Joe does a spit take, then shuts the hell up.

David L. Shutter said...

What Ockham said.

My $0.02 on PG:

Lest we not forget which BPH penned the (now infamous) MEMO on publisher RELEVANCE and VALUE.

Now, stand back and watch the NURTURING in action folks!

Joe Konrath said...

What could they possibly say to get around not contributing the money?

AFAIK, Macmillan never said anything. And Amazon reinstated the buy buttons fairly quickly.

Hachette's best PR move is to accept the author fund offer.

Hachette's best monetary move is to to deflect blame somehow and hope Amazon eventually accepts their terms.

Hachette's end move is bankruptcy. Like the rest of the Big 5.

David L. Shutter said...

I thought it was interesting when Zon said:

"-“stack it high” in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all,"

And

"A word about proportion: this business interruption affects a small percentage of Amazon’s demand-weighted units. If you order 1,000 items from Amazon, 989 will be unaffected by this interruption."

Am I the only one who saw a very shrewd and subtly veiled THREAT in that vernacular?

Anthony said...

Hachette has been lobbing 25mm grenades at Amazon and Amazon responded with a single round from single bullet... traveling at 100,000 feet per second.

The thing about the Macmillan buy buttons it was, in eBook time, over a century ago. Things are so much different, starting with the number of Kindle devices in use.

Amazon is the only party running on internet time, here.

Jude Hardin said...

Joe does a spit take, then shuts the hell up.

I'm guessing that means that some indies are offered co-op placement on Amazon?

Of course I guess you can by co-op placement in brick and mortar bookstores as well if you have enough money. Six figures, I've heard.

Data Guy said...

Paying their share of the author-recompense pool would not actually require that much money from Hachette.

In very rough ballpark numbers, so far we're talking eight or nine million in lost author-revenue on Kindle e-books -- maybe fourteen to sixteen million once you include print.

So far.

Joe Konrath said...

I'm guessing that means that some indies are offered co-op placement on Amazon?

Guess what you like.

Knowing Amazon, I bet they have something brewing. They tend to innovate, you know...

Joe Konrath said...

Paying their share of the author-recompense pool would not actually require that much money from Hachette.

Ack! Nine million isn't much?

It boggles my mind how much publishers are earning, if the author take was 9 mil.

And Hachette sure better take Amazon up on their generous offer of an author fund, or else Hachette authors may grab their pitchforks and torches and storm the castle.

Stephen T. Harper said...

"We’ve offered to Hachette to fund 50% of an author pool…”

I’d be curious to know when, exactly, that offer was made. And if anybody at Hachette might be fearful that this date might be causally mentioned in the next memo.

Jude Hardin said...

Knowing Amazon, I bet they have something brewing. They tend to innovate, you know...

Sounds good to me. :)

Jennifer Oberth said...

AFAIK, Macmillan never said anything.

But the offer wasn't public knowledge, right? Did the authors know about it? I don't think Hachette could get away with saying/doing nothing because authors (and one would hope their agents) would be urging Hachette to contribute to the fund and/or demanding to know what they plan to do.

Hachette's end move is bankruptcy. Like the rest of the Big 5.

I see this as inevitable, too. It's a shame. They're all businesses and you'd think the publishing houses would have been on the cutting edge of changes in its industry. Traditionally published authors should have been the first to publish ebooks. Agents should have negotiated fantastic terms at the start of this new technology.

If the Big 6 had focused their time, energy and money on the industry they cornered the market in, the Big 5 wouldn't be dying a slow death while locking horns with another huge company taking profits the new company deserve because they responded to market demand. Didn't authors hire agents and give up rights and money so they could write and the houses would take care of the business end? Epic fail.

Terrence OBrien said...

Allocating that fund to authors will be great fun. Will the Hachette authors fight over it? What kind of formula will they want to use? How far does concern for authors go? How about simply dividing it evenly among all Hachette authors? Each author gets the same amount.

Dana Stabenow said...

If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors.

Can we spell demure? I bet Hachette barely felt that knife slip in.

Anonymous said...

Allocating that fund to authors will be great fun. What kind of formula will they want to use? How about simply dividing it evenly among all Hachette authors? Each author gets the same amount.

That's how Random House allocated the fat profits they gleaned from scooping up Fifty Shades of Grey... $5,000 for everyone.

Oh, wait... those bonuses were for their employees.

Their authors got none of it.

http://www.washingtonpost.com/blogs/style-blog/post/random-house-employees-get-5000-bonuses-thanks-to-fifty-shades-of-grey/2012/12/07/803dcfda-40a5-11e2-a2d9-822f58ac9fd5_blog.html

Claire Chilton said...

...and are no longer taking pre-orders on titles whose publication dates are in the future.

Does this mean that they think my indie book is from Hatchette, or does it mean they have taken down pre-orders on a site-wide basis?

Or, does it mean that I got busted for having an indie pre-order that shouldn't have been allowed, and it just happened at exactly the same time as this?

It's nice to see Amazon respond by offering the authors money. I can't think of a better way to end a war than helping the casualties of it :).

Tom Maddox said...

Lilith Saintcrow via Twitter:

"I can’t even. Time to go play some piano and pretend a giant corporation didn’t just openly announce they're out to fuck up my livelihood!"

Still completely blind to Hachette's part in this little drama.

David L. Shutter said...

"Hachette has been lobbing 25mm grenades at Amazon and Amazon responded with a single round from single bullet"

"Can we spell demure? I bet Hachette barely felt that knife slip in."

Good analogies, but I don't think anything that subtle was implied in Zon's response. I'm thinking a slug doing Mach 7 from a Seattle based EM Railgun is more accurate here.

I bet it's gonna be a really long day in the Hatchett C-suite tomorrow.

Anonymous said...

I bet it's gonna be a really long day in the Hatchett C-suite tomorrow.

Memo to Hatchett execs:

Wear your brown pants.

Kelly Faunce said...

At this point, she seems to be fucking up her own livelihood.

Mightyflub said...

Some of the comments people have been leaving on this have me banging my head on the desk. I've just read this one left on a Verge article

WRONG

Hachette is currently selling ebooks under Agency 70/30 pricing (Hachette sets a list price for the ebooks and is paid 70% of that list, Amazon gets a 30% cut to which they can discount out of). Amazon wants them to change to an Agency 50/50 pricing scheme, increasing the margin at which he can sell ebooks while simultaneously reducing the amount Hachette and the authors of the books are paid. It isn’t about customer service, it’s about greed.

This has NOTHING WHATSOEVER to do with increasing prices. It’s all about Bezos trying to squeeze his suppliers to increase his margins.

Chris Meadows said...

Apparently Amazon made this offer to Macmillan two years ago. Since this is the first I've ever heard of it (Amazon rarely makes public statements) I can only assume that Macmillan DIDN'T take Amazon up on that offer. And my assumption is solid, because I know several Macmillan authors, and none of them got any sort of bonus check.

You sure about that, Joe?

"Amazon, Macmillan pay authors for books that were never sold"

The link to the letter mentioned has been lost by Open Road purchasing E-Reads, but Archive.org still has it.

JKBrown said...

Joe,

Does Hachette care about its authors?

We'll see...

I'm also eager to hear what Scott Turow, James Patterson, Lilith Saintcrow, and Charlie Stross have to say about this.


It's good you asked, Joe! I'll tell you what Saintcrow thinks.

Her 5/27 post begins with this nugget:
Comments have been closed on the previous post. The mod queue has been tightened up, for obvious reasons. It will relax again when the current storm blows over.

Translation: for reasons I can't explain but are quite obvious, I'm cracking down on all debate.

While the rest of the post is one sentence of praise for Charlie Stross' post and two paragraphs of slamming debaters (and ignores Amazon "because she has writing to do"... plenty of time to sort through comments and reply, though) It's a single comment that I guess slipped through to make her look smart. It was also devoweled:

"Looks like Amazon has offered to pay 50% for Hachette author's royalties during this contract dispute... if Hachette pays [their] 50%.

... ...

Can't wait for your next post after Hachette says no to Amazon's offer."

The dotted part (for what I could translate) was just harsh critisism of her personally. Her response to the comment?

You seem to be referencing this *Kindle Forum post* (a link to the cockeyedpessimist found in your post), where Amazon doesn’t even bother with a press release to tell Hachette authors just how much they’re being screwed.

She is in complete ignorance that Amazon ever posted anything, even though the guy clearly referenced it. The linked post doesn't even mention that detail from Amazon, instead bragging about his own 50% royalty gig. How do you get the two confused?!?

Does she just not know of the Amazon post and just thinks her commenter is full of it? If so, I can't wait to see what comes tomorrow.

Chris Meadows said...

I like the way Saintcrow thinks that Amazon posting their response to a forum (the same forum they used to post their manifesto about Macmillan's buy buttons and Jeff Bezos's personal apology for the 1984 debacle) makes it somehow less legitimate than if they'd issued it in a press release.

It's not as if a press release could have been any more widely reported than that forum post has!

Anonymous said...

Hey Joe are you writing anything other than these fisking blogs because I'm tired of your bashing everyone else, even if it's warranted.

Carlos Cooper said...

Reading the Hachette business made me think of The Black Knight scene in Monty Python and The Holy Grail.

Seriously, take a look. King Author tries to recruit the knight, gets rejected, but...well, you know the rest.

https://www.youtube.com/watch?v=OemlLB0wwsA&feature=kp

Thanks for the continued updates, Joe.

petemorin said...

Why would Amazon want to release this information to the press that has so uncritically gobbled up and puked out Hachette’s one-eyed propaganda?

They put it in the forum because (a) it says the customer is the most important audience, and (b) it says “fuck you” to the New York Times.

Joe Konrath said...

"Amazon, Macmillan pay authors for books that were never sold"

Thanks for the link.

I wonder why my Macmillan author friends said otherwise. I also wonder why this wasn't more widely reported when it happened.

So to Macmillan authors: did you get paid like the link said?

Joe Konrath said...

I'm tired of your bashing everyone else, even if it's warranted.

I'm tired of it too.

But somehow down the line I appointed myself to stop the stupid.

Dunno why. Dunno how to stop. It's just this thing I do.

Chris Meadows said...

Joe: They probably missed the letter, and the line item the letter referred to in their royalty statement. I personally remember seeing it mentioned lots of the e-book places I follow in my blog trawl at the time—I also wrote it up for TeleRead—but maybe the major media weren't interested.

Also, in re the stupid, this.

Joe Konrath said...

I added an addendum to my blog post, since I was wrong on criticizing Macmillan for not compensating their authors, when they apparently did.

Can any Macmillan author either email me or post in the comments the contract terms they were sent to raise ebook royalties from 15% to 25%, and let my blog readers know how much the bonus was?

And again, I was wrong. I'll even put that in bold.

I was wrong.

I apologize to my readers, and to Macmillan, for getting the facts incorrect.

Jennifer Oberth said...

But somehow down the line I appointed myself to stop the stupid.

Oh, Joe, you do know that's a losing battle, right? You can enjoy the ride (I sure love your blog) and stop some of the spread, some of the time, but you'll never get to your destination.

Anonymous said...

I feel so stupid, I've been reading about this since it all started and only now do I understand *why* Amazon is removing the pre-order buttons.

Amazon has no choice but to remove the pre-order buttons because Hachette is holding their books back and not filling Amazon's orders in a timely manner. It would be pretty bad for Amazon if they allowed pre-orders that they could not live up to when the time comes.

- I'm not an author, just love to read and trying to understand what is going on here.
I'm going to show some support for Amazon today and make an order, some e-books and a few discounted paperbacks.

m.r.storie said...

Hah. I told you it was war this time. When you live in the back of beyond, one of the things you gain is perspective.

I'm glad I hustled to get my first two E-books up on Amazon and am now closing in on the third.

I hope those two whiz guys over at authors' earnings are paying special attention to the stats while this dispute carries on. I'm too much of a novice at e-writing/machinations to be confident of predicting anything other than major surprises ahead.

Where do you think sales will go for E-book writers, Joe? Up or down?

w. adam mandelbaum esq. said...

Looks like amazon did a real hatchet job on a certain publisher. The tide is turning, this time in the right direction.JC in Matthew 13:57 was wrong when he said, "A prophet is not without honor except in his hometown and in his own household." The prophet Konrath has plenty of honor in this hometown and this household. Suspendisse opus, Joe!

David L. Shutter said...

" It would be pretty bad for Amazon if they allowed pre-orders that they could not live up to when the time comes."

Yes, it would seem that Zon is, GASP, putting customers (readers) ahead of what could be increased sales for themselves that, when not fulfilled, they could shrug and aloofly blame the publisher for it. Kinda like how a lot of retailers behave these days when your "speedy" shipping takes weeks after they've take your money for fast delivery; not the store/websites fault. Tough shit for you.

But, SHHHHH! Don't say it too loudly. It doesn't support the Evil Zon meme.

Anonymous said...

Why haven't anyone responded to Mightyflub? Their comment sounds wrong, but a rebuttal would be nice.

Joseph said...

I'm kind of sad that the big publishing houses are grasping so badly. But the smaller tighter companies with a more diversified skill set will surely take up any slack when the monoliths fall.

Mia said...

Hachette has released a statement. It basically says a lot of nothing, except for this:

“Once we have reached such an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate. ”

So basically, they won’t participate in an author compensation fund until an agreement is reached. Since Amazon implied an agreement is a long way off, there won’t be any fund anytime soon (and not because Amazon didn’t offer, but because Hachette has basically turned them down for the foreseeable future).

Dear Hachette authors, I think you now have your answer about whether Hachette really gives a damn about your current welfare or not. They’re just not that into you.

Dianna Dann Narciso said...

Hatchette has responded.
http://bit.ly/1hyEEjV

"Authors, with whom we at Hachette have been partners for nearly two centuries, engage in a complex and difficult mission to communicate with readers. In addition to royalties, they are concerned with audience, career, culture, education, art, entertainment, and connection. By preventing its customers from connecting with these authors' books, Amazon indicates that it considers books to be like any other consumer good. They are not.

We will spare no effort to resume normal business relations with Amazon—which has been a great partner for years—but under terms that value appropriately for the years ahead the author's unique role in creating books, and the publisher's role in editing, marketing, and distributing them, at the same time that it recognizes Amazon's importance as a retailer and innovator. Once we have reached such an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate."

canonizer said...

Joe, I don't think Hachette is pushing for the agency model. The DOJ settlement really gave them little control over pricing, except to the extent that they basically needed to use a wholesale model. I can't think that they would want the Justice apartment to come back saying they didn't comply.

canonizer said...

Anonymous said...
I feel so stupid, I've been reading about this since it all started and only now do I understand *why* Amazon is removing the pre-order buttons.

Amazon has no choice but to remove the pre-order buttons because Hachette is holding their books back and not filling Amazon's orders in a timely manner. It would be pretty bad for Amazon if they allowed pre-orders that they could not live up to when the time comes.


I did not read the same press release as you. Hachette appears to be filling orders, only Amazon is essentially ordering them on a book-by-book basis, rather than holding inventory (like most retailers) which is why they report severe delays to consumers.

Amazon is encouraging its customers to buy Hachette titles from third-party sellers, or a competitor. That kind of invalidates the whole "Amazon is a monopoly trying to ruin competition and must be stopped by the DoJ" debate. Since Hachette books are available for pre-order elsewhere, and since Amazon doesn't have a league of enforcers preventing people from buying Hachette books elsewhere (Amazon is even encouraging it), I can't see how the anyone can still make that silly argument.

I don't think this proves anything. If there ends up being no market outside of Amazon, doesn't that actually mean they are a monopoly? (I'm sorry I'm silly enough to present the argument)

Dan DeWitt said...

Are the titles available elsewhere? THEN IT'S NOT A MONOPOLY. Whether there's a "market" has no bearing whatsoever.

It also may be important to recognize that a monopoly (which Amazon isn't, amyway) isn't in and of itself illegal.

Mirtika said...

Amazon is not a monopoly. Saying it IS stupid. Amazon is just a very, very, very desirable shopping destination and one lots of us are addicted to, er, I mean, enjoy a lot.

I have a lovely Nook Color and I have Kindles. I got a B&N gift cert recently and bought some Nookbooks. I am reading a preordered Kindle book today. I can drive over to Books and Books or Borders and buy books. I can order from those places, too, and wait for it to come in.

I can get a Kobo book (I have the reading app and have dozens of titles in my Kobo library, which were switchovers from my Sony Reader library).

I also got two used books in the mail from independent booksellers who specialize in hard to find books (in this case foreign poetry and Cuban history).

So, um, where is the monopoly if I can buy and read books from various sources?

Hachette is a big boy (or girl or hermaphrodite) and they can set up shop on their own website--let folks buy DIRECTLY from them right there. How easy for them to sell ebooks on their site and offer nice discounts, no middleman.

Monopoly-screamers are so full of shit I need a gasmask. As a reader, I've got choices. I just happen to very much prefer reading on my Kindles and Kindle apps. The day I don't like that anymore, I'll go buy someone else's books and use their apps. (Dont' see that happening soon.)

Jill James said...

All this stuff is like a snowball rolling down hill. Hard to keep up. Thanks for helping.

Anonymous said...

I'm a long time Hachette author who will not be signing another contract with them. Not just because of this foolishness, but adding this to the already existing issues of their refusal to drop joint accounting, their ridiculous non-compete clauses, the lies, the inconsistencies and the general lack of promotion makes it clear that self publishing is the only way I'm ever going to make a living.

m.r.storie said...

Hachette's response puts me in mind of a Victorian aristocrat sneering down his nose at a go-getting, middle-class retailer (who is making far more money).

I thought Joe was exaggerating a tad about the arrogance of the landed book gentry until I read this.

Honore de Balzac wrote romantic potboilers on the side; Hemmingway was reviled by reporters who worked with him at the Toronto Star (and were unable to figure out what he had that they didn't).

The great literary writers were all innovators by definition. They all upset the apple cart in their day. I know damn well who they'd be publishing with these days if they were alive.

Stephen T. Harper said...


"I don't think this proves anything. If there ends up being no market outside of Amazon, doesn't that actually mean they are a monopoly? (I'm sorry I'm silly enough to present the argument)”

Well, I’m not trying to be rude, but silly or not, it’s just not really an argument at all. The answer to your question is a straightforward “no.”

“Monopoly" doesn’t mean “really big” or “really successful.” It means that people have no choice but to go to you for a service or product.

Amazon is literally telling people to buy Hachette stuff from other retailers. Other retailers that do exist and are just a mouse-click away.

From a customers point of view, Amazon is a website. You don’t even have to leave your chair to find another one that will sell you whatever you want.

If you are a publisher, however, you will have a hard tome finding another website that sells that many books. But that’s a different question.

And when we are answering that question, it would be good to keep in mind that Hachette is not Amazon’s customer. They are a vendor and Amazon is a store.

Dan DeWitt said...

This is kind of an odd thing for Legardere's CEO to say right now:

"Hachette, the fourth largest book publisher in the United States, is owned by French media group Lagardere. Its CEO Arnaud Nourry said on Wednesday he hopes for an early end to the dispute, adding that it should not affect online sales this year."

Wait, so Amazon's NOT destroying author's livelihoods, and this is ultimately not a huge deal? Weird.

http://in.reuters.com/article/2014/05/28/uk-hachette-amazon-com-idINKBN0E822B20140528

Anonymous said...

I'm tired of your bashing everyone else, even if it's warranted.

I'm tired of it too.

But somehow down the line I appointed myself to stop the stupid.

Dunno why. Dunno how to stop. It's just this thing I do.


So just to clarify, you aren't writing anything other than this blog.

Dan DeWitt said...

Anonymous, that literally makes no sense.

Broken Yogi said...

"Joe, I don't think Hachette is pushing for the agency model. The DOJ settlement really gave them little control over pricing, except to the extent that they basically needed to use a wholesale model. I can't think that they would want the Justice apartment to come back saying they didn't comply."

That's not true. The DOJ settlement did not bar any publisher from seeking an agency agreement with Amazon or any distributer or retailer of its books, after the cooling off period (with Hatchette being the first in line to negotiate new terms). The DOJ settlement barred publishers from imposing an agency model through collusion, but not through separate, individual negotiations.

So Hatchette is free to seek an agency pricing model with Amazon now, and it probably is, for the same reasons it sought one a few years ago. It just can't collude with other publishers in trying to impose that model on Amazon. And be clear, like the other big 5/6, Hatchette really feels that agency pricing is essential to its future, just as Amazon thinks that it is terrible for its future, and that of its customers. Hence the impasse.

There may be other issues involved, but it's fairly certain that agency pricing is the heart of the dispute.

Tony said...

"So just to clarify, you aren't writing anything other than this blog."

Funny, when I go to the Konrath page on Amazon and sort by publication date, I see 10 titles (including translations, box sets, etc.) released this year alone.

And you have how many again?


Rob Gregory Browne said...

I was a Macmillan author at the time, Joe, and I don't remember getting a cent or being offered anything. But then I don't have the best memory...

Broken Yogi said...

Joe,

These posts the Hatchette situation, the stupidity of Turow and the author's guild, Hugh Howey's author income reports, and most importantly, the whole lowering of royalties by ACX on audiobooks gives me an idea, maybe one you've already thought about.

It's the notion that maybe what we need is an Self-Publishing Author's Guild, one that can negotiate with the big boys.

The reason for this should be obvious. Self-publishing authors have no protections. While I think it may never happen, Amazon certainly can do away with the 70% royalty program and go back to 35% any time they like, as they did with ACX. What's to stop them? It's actually a legitimate criticism of self-publishers relationship with Amazon, in that all the power is on one side of the equation.

A Self-Published Writer's Guild, on the other hand, could threaten to boycott Amazon (if its membership included the best-selling self-publishers) if its terms were unacceptable. It could negotiate better deals with Amazon's rivals to keep the distribution channels in check.

Hugh Howey's author income report, which shows that self-publishers are now a really big part of the income pie, means that self-publishers ought to exercise corresponding power in the industry, and that means an ability to negotiate with distributers and retailers. (and even cover other issues like access to print distribution).

Individual self-publishers have no power at all, but as a group they certainly could. That's what unions are supposed to be for. It's obvious the current Writer's Guild not only doesn't represent their interests, but actively opposes them. So self-publishers need their own Guild to protect their own interests, and to negotiate the best deals they can for their membership. Obviously that would not include everyone who self-publishes, but it certainly could represent the bigger sellers, the writers who actually make a living from self-publishing, and those who aspire to.

What do you think? The time may be coming for such a union. Maybe you'd be the guy to spearhead it. Or at least advocate for it, if you think it's a good idea. If not, I'd love to hear your reasons.

Jennifer Oberth said...

I've been waiting for a Self-Published Author's Guild to form at some point. I'd be interested - especially if Joe is part of running it, advocates it, points out all its faults...

Joe Konrath said...

Thanks for the links to the updates. I added another addendum to the blog post.

Joe Konrath said...

It's the notion that maybe what we need is an Self-Publishing Author's Guild, one that can negotiate with the big boys.


I nominate Hugh Howey.

If he needs me to consult, he has my number.

Burton said...

"So just to clarify, you aren't writing anything other than this blog."

LMAO. Right, because you're just sitting there waiting to buy Joe's latest book, huh?

Rob Gregory Browne said...
This comment has been removed by the author.
Rob Gregory Browne said...

I have about as much interest in joining a guild as I do getting dental surgery.

I belonged to a guild for many years—the WGA—and all it ever did for me was suck dues and get me into theaters for free during awards season.

I can't see how a Self-Publishing guild would be any more effective that the one Turow runs.

Dan DeWitt said...

Hey, Joe, you wrote:

"Know: Hachette are currently not agreeing to Amazon't author fund idea, but will discuss it after an agreement is reached."

However, others on TPV have pointed out that the language Hachette used indicates that they're not actually agreeing to pay anything.

Read the language closely:

"Once we have reached such an agreement, we will be happy to discuss with Amazon its ideas about compensating authors for the damage its demand for improved terms may have done them, and to pass along any payments it considers appropriate."

Hachette has no intention of ever helping their authors recoup their losses. But they'll make sure they pass along any payments that *Amazon* makes.

Unless Lagardere's CEO is correct, and there aren't any losses.

This is getting complicated.

Anonymous said...

Joe, check out this article, linked from a Facebook wall of a big six author who thinks Amazon is the bad guy:

http://gawker.com/lets-boycott-amazon-now-where-do-we-buy-stuff-1582813613/all

It's fresh off the presses, proving Amazon Derangement Syndrome is alive and unwell.

Joe Konrath said...

I can't see how a Self-Publishing guild would be any more effective that the one Turow runs

I'd like two things: health insurance, and a united front to negotiate with retailers if needed.

A group of 10,000 authors could probably find a group health insurance plan that costs less than I'm paying Blue Cross, and if 10,000 authors threatened to pull their books, that's power.

Joe Konrath said...

It's fresh off the presses, proving Amazon Derangement Syndrome is alive and unwell.

There is something about being big that makes people hate you. Doesn't matter if you're Obabma, Bieber, Wal-Mart, McDonalds, Oprah, or Mother Theresa. Once you reach a certain stature, you start getting criticized, and you get haters.

And the haters often don't think before they speak, or use logic or facts to back up their opinions.

That's life. Lots of stupid people who complain.

Amazon can handle itself. And those who are morally outraged by Amazon's behavior will wind up shopping elsewhere, until that new store morally outrages them.

Joe Konrath said...

Hachette has no intention of ever helping their authors recoup their losses. But they'll make sure they pass along any payments that *Amazon* makes.

Has any Hachette author said, "Hey! That sucks!"

My guess is no. Even if the think their publisher is wrong, there is no advantage to badmouthing them. Publishers can tank a book pretty easily.

In fact, right now they're tanking a lot of books, because they won't accept Amazon's terms.

I'll repeat this for all Hachette authors: Your publisher cares more about winning this negotiation than it cares about your book.

But keep blaming Amazon. Righteous indignation feels good.

Broken Yogi said...

I nominate Hugh Howey.

Even better. But with you on the advisory committee.

And yeah, health insurance.

Biggest issue of course is protecting high royalties for self-pubbing.

And maybe negotiating with Amazon and others to get that pre-order button for members.

And better royalties from ACX.

Anything else?

Peter Spenser said...

@Mirtika

“Monopoly-screamers are so full of shit I need a gasmask.”

I love that line!

Joe Konrath said...

I've had pre-orders on KDP before--they allow a few authors to do that.

The problem with pre-orders for all KDP users is Amazon can't reset ship dates without people getting angry, and they have no way to guarantee authors will get the ebook finished on time.

For example, you create a pre-order page for a book coming out June 1. But your formatter didn't finish on time. So you have to reset the release date, which makes customers mad, and they blame Amazon.

Claire Chilton said...

For example, you create a pre-order page for a book coming out June 1. But your formatter didn't finish on time. So you have to reset the release date, which makes customers mad, and they blame Amazon.

Joe,

What about if Amazon made you upload the book first? I mean, most books require a couple of months prior to release where they get sent out to reviewers, so all the bloggers can do their reviews in time for release day. In that case, you need a finished product a couple of months before the release, so pre-orders would be possible because you'd have already delivered a product to Amazon. It would just be in a holding place prior to release and not on sale until the reviewers are done with it. Amazon has their product, and you have time to tweak it where necessary while gathering reviews.

(Just an idea. I don't actually send my books out to reviewers because I don't know any, but you know if I did, the book would be ready a few months in advance for their ARCs.)

An indie authors guild would be good as long as there was a democratic way to keep it honest. There certainly is power in numbers that indie authors don't utilise right now, and writing is a lonely gig. There is friendship, support and advice in numbers too. You might need a troll-watch or BS detector in the group though, to keep it a nice place to be.

In my experience, the indie world is made up of pockets of a dozen or so authors huddling together somewhere in their own little tribes. It would be nice if those tribes could come together somewhere.

**Totally off subject comment: That Anonymous person who keeps whining about you fisking people. Did they not notice that by doing so you are providing information to indie authors that will assist them in making decisions for their books and futures?

Well, I find your posts informative and useful for what it's worth. I might stray onto my own path with my books, but I'm fully informed on what I'm doing thanks to your fisking posts. I think they benefit everyone.

Claire Chilton said...

For example, you create a pre-order page for a book coming out June 1. But your formatter didn't finish on time. So you have to reset the release date, which makes customers mad, and they blame Amazon.

Joe,

What about if Amazon made you upload the book first? I mean, most books require a couple of months prior to release where they get sent out to reviewers, so all the bloggers can do their reviews in time for release day. In that case, you need a finished product a couple of months before the release, so pre-orders would be possible because you'd have already delivered a product to Amazon. It would just be in a holding place prior to release and not on sale until the reviewers are done with it. Amazon has their product, and you have time to tweak it where necessary while gathering reviews.

(Just an idea. I don't actually send my books out to reviewers because I don't know any, but you know if I did, the book would be ready a few months in advance for their ARCs.)

An indie authors guild would be good as long as there was a democratic way to keep it honest. There certainly is power in numbers that indie authors don't utilise right now, and writing is a lonely gig. There is friendship, support and advice in numbers too. You might need a troll-watch or BS detector in the group though, to keep it a nice place to be.

In my experience, the indie world is made up of pockets of a dozen or so authors huddling together somewhere in their own little tribes. It would be nice if those tribes could come together somewhere.

**Totally off subject comment: That Anonymous person who keeps whining about you fisking people. Did they not notice that by doing so you are providing information to indie authors that will assist them in making decisions for their books and futures?

Well, I find your posts informative and useful for what it's worth. I might stray onto my own path with my books, but I'm fully informed on what I'm doing thanks to your fisking posts. I think they benefit everyone.

Anonymous said...

Looks to me like Joe is right.

It's about the publishers wanting to hold on to the agency model to keep Amazon from getting too big, and windowing, where they release a hard cover first, then delay digital release. Apparently Amazon doesn't want that.

http://www.publishersweekly.com/pw/by-topic/industry-news/bea/article/62520-bea-2014-can-anyone-compete-with-amazon.html

(anonymous because I'm traditionally published)

Terrence OBrien said...

A group of 10,000 authors could probably find a group health insurance plan that costs less than I'm paying Blue Cross, and if 10,000 authors threatened to pull their books, that's power.

Health insurance is great idea. Send me the forms when available. But economic power depends on the power of the other guy in the negotiation. I suspect Amazon would humming, Farewell and adieu to you, Spanish Ladies...

In fact, I wouldn't be surprised if thats the phone message Hachette gets when they call Bezos.

Broken Yogi said...

Let me remind everyone thinking about the idea of an Self-Published Author's Guild that as the digital revolution proceeds, and Amazon gets stronger and publishers get weaker, more and more successful authors will turn to self-publishing. And that means the collective power of such a Guild would carry increasing weight, and not be something Amazon or other digital distributors could ignore.

One thing all these decades and centuries of dominance over authors by publishers have done is to convince authors that they are powerless and can be stomped on by the almighty publishing, distribution, and retail corporations.

But remember the essential principle of the digital revolution: none of those middlemen are necessary, not even Amazon. The only essential relationship is the one between authors and readers. It is absolutely insane and a sign of collective Stockholm Syndrome for writers, whether legacy or self-published, to presume that they are powerless in the face of the established players in this industry. Nothing could be farther from the truth, unless they continue to believe these lies.

One of the most important outcomes of this entire digital revolution in publishing is for writers to recognize the power they have, and to exercise it collectively, through a Guild or union that is not afraid to flex its muscles. They are the only ones who actually produce content, let's remember. And digital means that distribution has no central hub that can control authors. The day will come when it won't be publishers who dictate to authors their terms, or even Amazon, but writers Guilds that dictate the terms to publishers and digital distributors. Or they may even form their own.

Anonymous said...

There's a point in all this that should be clarified. Hachette is seeking the best deal for itself, as is Amazon. Whether it's about discounts, co-ops, agency models, whatever, both companies are legally and ethically entitled to fight for their own best interests. However, Amazon - and Amazon alone - has chosen to use the tactic of delaying orders and removing pre-order buttons. Hachette did not and could not force them to do that. Once more, just to be absolutely clear, the aspect of this fight that's got everyone angry is solely Amazon's doing.

Amazon is irrefutably the only party to this that has behaved in a way that is disruptive to authors' sales. If you're okay with that, then fine. But stop blaming Hacheete for a decision by Amazon that Hachette had zero control over.

If you punch me on the nose, should I blame myself for my face getting in the way of your fist?

And Joe, a simple yes/no question for you, because I'm genuinely curious: Do Amazon give you greater visibility on their site, or any other kind of compensation, in return for your advocacy?

Alan Spade said...

Let's remember we authors have not only our books to use as weapons. We have also our newsletters, social medias, blogs, forums to engage directly the readers, and explain them why, in the most extreme case, we choose to boycott one given retailer.

If that Self-Publishing Guild could have 100,000 authors, indeed that would be power, because even an author selling just 5 or 10 books can be heard on social medias. We could coordinate much more efficiently some actions, if need be.

We could also have a department collaborating directly with online retailers such as Kobo or Amazon, and suggesting for example better royalties for ebooks less than $2.99. We could also work toward some win-win deals.

Alan Spade said...

Of course, the danger for this Self-publishing Guild would be to become some sort of mega-publisher, with vetting process and visibility for only a few chosen. And corruption, of course.

Scott Gordon said...

"There's a point in all this that should be clarified. Hachette is seeking the best deal for itself, as is Amazon. Whether it's about discounts, co-ops, agency models, whatever, both companies are legally and ethically entitled to fight for their own best interests. However, Amazon - and Amazon alone - has chosen to use the tactic of delaying orders and removing pre-order buttons. Hachette did not and could not force them to do that. Once more, just to be absolutely clear, the aspect of this fight that's got everyone angry is solely Amazon's doing."

I knew you'd show up eventually, Lilith Saintcrow.

Dan DeWitt said...

Hey, anonymous, where does it say that Amazon's delaying shipments? Some people keep saying that, but have nothing to back it up. Conversely, an agent who represents several Hachette authors states that Hachette's doing the delaying, a charge that Hachette declined to refute when asked.

The damage that Amazon is causing authors by removing pre-order buttons is debatable, at best. But at least they've offered to help mitigate the damage. What's Hachette doing to help?

To sum up, Amazon is using leverage, as is Hachette. All of it legal (this time, even for Hachette!), that we know of.

But keep on talking out of your ass.

Dan DeWitt said...

And another thing, anonymous Hachette author(s) everywhere who are bitching, you're the ones who chose to sign your shitty contract. Even after this whole thing is a memory, you'll still be getting screwed by the company you're advocating for right now.

Stop blaming Amazon for screwing up your career. Look at your contract, then look in a mirror.

Anonymous said...

Anonymous at 5:41AM here.

First off, I'm neither Lilith Saintcrow nor a Hachette author.

Second, to address Dan Dewitt's hostile and insulting response: The first sentence of Amazon's statement says clearly that they are no longer keeping stock of Hachette titles on hand for immediate delivery. Further, Hachette have stated that they are shipping all Amazon orders as they come in.

So, again, the order delays are entirely Amazon's doing. This has been clearly stated by both parties. Whether you feel that is an ethical act on Amazon's part is up to you, but the fact remains that order delays are not Hachette's doing.

This dispute could have been kept in the boardrooms of these companies, but instead Amazon - not Hachette - chose to use order delays as leverage. That's the reality of the situation, it's there in the companies' statements.

And Dan, your hostility is exactly the reason why those who disagree with Mr Konrath feel the need to post here anonymously.

Anonymous said...

(Call me anon TP to distinguish me from the hostile anons)

Stocking Hachette titles costs Amazon money.

Giving Hachette authors discounts costs Amazon money.

The bully here is Hatchette, saying publicly, "If Amazon does not continue selling our titles at any terms we name, Amazon is harming our author's careers."

Why is it all Amazon's fault if they haven't reached an agreement? Without knowing what each side is demanding, there is no way to point blame.

I see Hachette as the bully. The bullying tactic of collusion didn't work.

Did you see the opinion of the industry experts I linked to above? Insiders seem to feel that without agency pricing, Amazon will get too large, and without the ability to window, big publishing profits will diminish.

The reason the Hachette letter is full of emotion and venom is because they are fighting for their lives. Agreeing to warehouse pricing and agreeing feels suicidal to them.

This is all about middlemen (editors and publishers) trying to remain relevant by insisting on agency and insisting on windowing.

Hatchette is pretending using their authors as shield to bully Amazon into accepting its terms.

Dan DeWitt said...

Anonymous, I knew you weren't Lili, because she uses her name.

Now, Amazon buying LESS stcok at a time from Hachette isn't even close to "delaying orders." Amazon's electing not to pay for warehousing Hachette's books during the negotiation.

I notice that you completely ignored the fact that Hachette was actually delaying shipments to Amazon, but I'm not surprised.

Also, lots of anonymous commenters post here and are treated with respect. Want to be one of them? Maybe next time you shouldn't post anonymously and say, "Hey, Joe, how much is Amazon paying you to be their shill?"

Dan DeWitt said...

See? Anon TP seems nice!

Anonymous said...

(Anon TP)

Wrote quickly: The last sentence was supposed to read without "pretending."

Hachette is using its authors to bully Amazon.

They are telling Amazon, and everyone else, "If Amazon does not keep our books in stock and discount our books at a cost to Amazon, Amazon is harming our author's careers."

Hey, hostile anonymous: Can't you see a problem with that?

No retailer owes any supplier shelf space or discounts at its own expense, particularly when that supplier is trying to force terms on the retailer that the retailer does not want.

Anonymous said...

(Anon TP)

Thanks, Dan.

I'm not so nice. I'm a realist, watching this whole thing understanding that my livelihood will be affected. (TP stands for Traditionally Published)

What amazes me is the sense of entitlement that so many TP authors have. "We are published by Hachette, therefore we have the right to be stocked by whatever retailer Hachette selects, and whatever terms Hachette dictates, and if the retailer doesn't comply, the retailer will be guilty of harming our careers."

Dan DeWitt said...

We're in complete agreement on this. I definitely feel bad for the TP authors who are affected during the negotiations, except for the ones who are a) unreasonable in their expectations of what Amazon owes their publisher, b) in complete denial that their publisher is also looking for an edge, and c) seeing nefarious motives in quite literally everything Amazon does ("What? They offered to help me with lost royalties??? I'D RATHER DIE THAN SUBMIT TO THEIR NAZIESQUE DEMANDS!!!").

This is just a business negotiation, no more. I know a lot of TP authors like you recognize this. Unfortunately, as in other walks of life, the reasonable people tend to not be the screamy ones.

Anonymous said...

Anonymous at 5:41AM again.

Dan, I did address Hachette's delivery of orders. If you chose to ignore that, that's up to you. But I'll repeat it anyway: Hachette have stated they are shipping Amazon orders as they come in. Further, Amazon have not disputed that, which I'm quite certain they would have if it were not true.

My question to Joe is a challenging one, of course, but I phrased it politely. You changed my words to sound much more accusatory and snide. That is your hostility, not mine. You also issued a strong of insults about my "shitty contract" and my (paraphrased) "screwed up career".

You don't know what, if any, contracts I have. Or how many, or in what territories, or covering which rights. So how can you comment on the terms of those contracts? You have no idea of the state of my career, or even what profession I'm in.

I made all my points dispassionately, politely and with no personal rancour. You resorted to misrepresentation and insults. I have no wish to get into a personal argument with you, but I feel it's worth highlighting your hostility as an example of why people with different view points are discouraged from posting here under their own names.

And TP Anonymous - You have no justification for calling me hostile. As I've said, every point I have made has been made politely. Disagreeing with you does not make me hostile.

There's a lot of debate to be had on the changing landscape of publishing, but this blog is not a welcoming environment for such debate.

Anonymous said...

(Anon TP)

I don't think the big publishers are going to go away. But as Kris Rusch predicted a while ago, they will become less important, the way the networks become less important.

Every supplier is terrified of becoming too dependent on a single retailer. Ideally, no retailer is responsible for more than 10% of a supplier's business. In the case of Amazon, publishers view Amazon as hostile to them because (1) he doesn't see the value in middlemen, and (2) he doesn't see the value in gatekeepers.

Bezos thinks publishers can disappear and art and literature will be fine.

So I understand why Hachette is terrified of becoming even more dependent on Amazon, which is what they see will happen if Amazon succeeds in forcing them to give up agency pricing and windowing.

They are not exactly fighting for their lives. Companies with 3+ billion in revenue don't disappear. But if they don't win this, eventually, like the networks, their importance will decline dramatically.

I'm the weird TP who thinks that's good. So far trad works better for me. In the future, it might not.

Anonymous said...

(Anon TP)

Hey, other Anon. Sorry to call you hostile. I meant it in the sense feeling hostility to and from this site.

But you didn't address my comments pointing out how Hachette is actually the bully here.

Do you see the point?

Dan DeWitt said...

Bad Anonymous, you have no idea what Amazon would or wouldn't dispute, as they tend to not negotiate in the media. Novel concept, I know. However, the initial report that Hachette was delaying shipments by weeks came from an Amzon rep who provided purchase order dates. When the agent asked Hachette to see the purchase orders, Hachette wasn't forthcoming.

You didn't phrase your question to Joe "politely." You phrased it "formally." It's like people who slip in "Sir" when they're insulting another person. At any rate, the implication was clear, and my rephrasing was a much more honest representation of your intent. Good grief, own up to something.

Also, I specifically addressed HACHETTE authors (and only the squeaky wheels, at that), which you said you weren't. So move on. Unless you're lying.

Anonymous said...

Anon 5:41 to Anon TP.

Thanks for the explanation.

As for your points, I've not really been addressing the idea of who is or isn't a bully. I've been addressing the fact that Hachette doesn't have it within its power to make Amazon remove pre-order buttons or delay orders. Only Amazon can do that. That's simply a matter of fact. The ethics of Amazon's decision is another matter entirely, but it is Amazon's decision, not Hachette's.

Dan DeWitt said...

Once again, not "delaying orders." The fact that you keep saying it tells me everything I need to know.

Anonymous said...

(Anon TP)

Other Anon: You said Amazon is the one harming author's careers. Hachette hasn't done anything at all to harm an author's career.

The careers are being harmed because Hachette and Amazon have not come to an agreement.

They haven't come to an agreement because Hachette is trying to force terms on a supplier that the supplier doesn't want, and the supplier is resisting.

What is harming the author's careers is that Hachette is using bullying tactics to try to force a retailer to accept terms the retailer doesn't want, and the retailer is saying "If you do not accept my terms, I will not stock your product."

So you are holding Amazon responsible for harming the author's career because Amazon will not sell books in its store under terms forced upon it by a supplier.

(I wrote quickly. Please forgive errors.)

Anonymous said...

Anon 5:41 to Dan

"Bad Anonymous" - I haven't called you names, although "Bad" isn't terribly, um, bad. But it does exemplify your tone.

"Good grief, own up to something." - My question is there for all to see, and the manner in which I asked it. What do you want me to own up to? A different question entirely? Please don't project your hostility on to me. Joe is a big boy and choose to answer the question, or not, as he sees fit. It's a straightforward question, asked politely. I have refrained from misquoting you, and will continue to do so; I'd appreciate the same courtesy from you.

"Also, I specifically addressed HACHETTE authors (and only the squeaky wheels, at that), which you said you weren't. So move on. Unless you're lying." - But you were also addressing me specifically, and I responded. At no point, however, did I call you a liar, or cast unfounded aspersions on your career.

I have to get back to work, but once again, where I have been polite, you have been hostile and insulting. If you're content with that, okay, but know that it adversely affects the quality of debate around here.

Anonymous said...

(Anon TP)

Yup. as soon as I hit the button, I saw a mistake.

I said supplier and meant retailer.

Hachette, a supplier, is trying to force terms on a retailer that a retailer doesn't want.

Suppose I am a carpentry company. I have carpenters working hard for me, building cabinets. The largest retailer for our cabinets is Retailer A.

I insist that Retailer A sell our cabinets at the terms I dictate. Retailer A says "no way. We are not selling your cabinets at those terms."

Then the carpentry company says, "Retailer A won't sell our cabinets (at the terms we demand)! They are not taking preorders! They are not offering discounts (at the terms we demand.) They are harming our carpenter's careers!"

Silly?

Then all the carpenters shout that Retailer A is harming their careers.

Anonymous writers say, "The only party harming our career is Retailer A."

Dan DeWitt said...

You're sure not much of a reader.

I never at any point addressed your contract or career. I specifically directed it at HACHETTE authors. Then you said:

You don't know what, if any, contracts I have. Or how many, or in what territories, or covering which rights. So how can you comment on the terms of those contracts? You have no idea of the state of my career, or even what profession I'm in.

Agreed, which is why I never said it to you. Again, I addressed HACHETTE authors. So you're wrong.

When I said that you should own up to something, I was referring to the fact that you're acting like your "inquiry" to Joe wasn't the accusation that it actually is. It's really disingenuous.

We've both been hostile and insulting, but only one of us is being straightforward about it; the other is attempting to paint themselves as civil. And I was only hostile to you because you came in like an asshole.

At the end of the day, neither one of us cares. If you want to debate, bring up a legitimate point. If you're going to make shit up (e.g. "delaying orders"), you'll get hammered.

Joe Konrath said...

What about if Amazon made you upload the book first?

If the book is finished, there is zero need for a pre-order page.

In the digital world, getting the ebook live as soon as it is finished is a no-brainer. Every day it isn't live is a day it doesn't sell. Some people just don't like to pre-order.

If it's done, publish it.

Anonymous said...

Anon 5:41 to Anon TP.

To clarify: I have not commented on the ethics or harm (or otherwise) of this spat on authors' careers. I haven only tried to point out whose decision it was to remove pre-order buttons and hold such minimal stock that it delays customer orders (sorry, Dan, that's the fact of the matter, it's all there in the company statements). I'm not going to debate the rights or wrongs of this, or the extent of any harm it might do. It's simply a matter of getting the facts right.

Hachette cannot remove a pre-order button from Amazon's site.

Hachette cannot force Amazon to reduce the stock it keeps on hand.

Hachette cannot force Amazon to raise prices on specific titles.

Hachette cannot make Amazon suggest alternative products.

Those are all things that Amazon has chosen to do. That's irrefutable.

The negotiations behind Amazon's actions are another matter, but can I just highlight one of your points:

"They haven't come to an agreement because Hachette is trying to force terms on a supplier that the supplier doesn't want, and the supplier is resisting."

That implies that the negotiation is in only one direction, and that only one party holds any power over the other. If I turn that point around and say that Amazon is trying to force terms on Hachette that Hachette doesn't want, it makes Amazon seem more aggressive. But it's a two-way street, and both companies are entitled to fight for their own best interests. The fact remains, however, that Amazon's actions in response to the dispute are the ones that have gotten the media's attention.

Anonymous said...

Anon 5:41 to Dan.

Your post at 7:00am immediately follows a post at 6:50am that specifically says I'm talking out of my ass, and begins with using the word "author(s)", meaning you're directing it both at me and a wider target. I didn't point out that I was not a Hachette author until later, so I perceived it as being directed at me personally. I'm willing to give you the benefit of the doubt on that, but I hope you can see how I took it that way.

That doesn't, however, alter the fact that your response is insulting. It just means you're insulting many people instead of one.

Here's the thing: I'm not pretending to be civil. I AM being civil. If you can't tell the difference, then there's really nothing I can do for you.

Now I really have to get back to work.

Joe Konrath said...

Do Amazon give you greater visibility on their site, or any other kind of compensation, in return for your advocacy?

I was the first legacy published author that Amazon pubbed, both in DTP (what KDP used to be called) and A-Pub (back when the only imprint was Encore). I put my work up in 2009 and began to blog sales numbers (one of the first authors to ever do so) which opened up many authors' eyes to Amazon's potential as a publisher.

I advocated Amazon because they were an alternative to legacy, and a viable one. Not because they ever compensated me in any way.

I've also criticized Amazon, a lot. Readers of this blog haven't seen how much.One of the amazing things Amazon does is call authors and ask how they're doing.

You heard right. They actually solicit criticism from authors.

And they listen. A lot of the changes and innovations Amazon has implemented is because authors have asked.

I've been critical of Amazon in private, in person or on the phone with various Amazon personnel, or through email.

I've also been fortunate to have been involved with many beta programs Amazon tries out. I know others who are also in these programs, and they don't have blogs advocating for Amazon. A bunch of us, for whatever reason, have been guinea pigs for years. We keep giving Amazon feedback, and they keep adjusting things to make them author friendlier.

Well, some things. Some things they stick with even though authors don't like it (KDP Select exclusivity and not pubbing in epub are two that come to mind.)

I'm probably responsible, via this blog and personal contacts, for thousands of authors publishing with Amazon.

But Amazon doesn't compensate me. They don't even treat me like a favorite son. They treat me like they treat all of their authors and customers. Which is to say they treat me well. I do have the ears of a few who work there, but I don't get preferential treatment compared to other authors I know, and they don't thank me for my advocacy on this blog.

And that's how it should be. My goals, and Amazon's, are currently aligned. That's the kind of publisher I want. There isn't nepotism, there aren't kick-backs, and I don't doubt that some who work at Amazon dislike me.

As long as Amazon keeps being author-friendly, I'll support them. Not because I owe them, or because they treat me better than anyone else (something other publishers do with their biggest authors).

Joe Konrath said...

And corruption, of course.

Corruption is a realistic concern.

So is stupidity.

Authors, as a group, haven't shown themselves to be the brightest. The stupid feeds more stupid, the internet is an echo chamber, and whenever an organization forms and the members aren't deliberate or self aware, stupidity takes over. Hence the Authors Guild.

Joe Konrath said...

Second, to address Dan Dewitt's hostile and insulting response:

Hint: it's easy to be hostile and insulting when someone posts anonymously. It shows a lack of confidence, even cowardice.

It's probably human nature. Anonymity dehumanizes people, making it easier to disrespect them.

But keep in mind that snark and sarcasm aren't the same hostility and insults. Calling someone a motherfucking asshole and saying "I hate your guts" are what I'd consider insulting and hostile, and Dan didn't come close to that.

But we can all dial the emotion back a notch, me included. Let's keep the debate on the debate, not personal.

(Though, in candor, how can anything anonymous be personal?)

Joe Konrath said...

Stop blaming Amazon for screwing up your career. Look at your contract, then look in a mirror.

Dan is right. He's being a bit harsh, but it's the truth.

I know a lot of authors are locked into bad contracts (I'd say 99% of them) and no doubt feel helpless. They can't criticize their publishers for two reasons.

1. Fearing ramifications from their publishers.

2. Not wanting to blame themselves.

So Amazon becomes the focus of their anger. They want to lash out at something, and Amazon is the obvious target.

Stop blaming Amazon and do what you can to get out of your contract. Buy your way out. Hire a lawyer.

But before you can do that, you have to admit your situation, and that means rebooting how you think about your career and this industry. Not easy. I know, because I had to do that myself, and I was one of the first (the first?) to risk my career on an unproven hunch.

It's still risky to quit legacy and self-pub, but it is no longer unproven. There is now plenty of proof. The trail has been blazed. You just need to go for it.

Dan DeWitt said...

ofor me. I'm up for a good ol' fashioned, fact-based debate as much as anyone. Admittedly, I do tend to react poorly when a person comes onto someone else's blog and insults (explicitly or otherwise) the host without provocation.

My only real problem with Anonymous is their insistence that Amazon is delaying orders to customers, when that's clearly not the case.

Dan DeWitt said...

That's supposed to lead with, "Works for me." Stupid fat fingers.

David L. Shutter said...
This comment has been removed by the author.
Joe Konrath said...

There's a lot of debate to be had on the changing landscape of publishing, but this blog is not a welcoming environment for such debate.

As opposed to the rest of the internet, where every forum is fair and balanced without anyone taking anything personally?

I allow anonymous posts, but I never post anonymously. Frankly, I don't understand it.

But how can you be offended by perceived attacks when they can't be personal because no one knows your name? Anonymity is a shield of sorts. If someone insults you, your ego shouldn't get engaged, because you're nameless. It's not an insult to you, but to your invisible avatar that is unconnected to you.

When people use their names here, I spend extra time making sure we all play nice. This shouldn't be a personal debate.

Anonymity is problematic because it dehumanizes.

That said, I've found your remarks to be level-headed and sincere. So stop worrying about how people are treating your anonymous persona, and continue to engage. I'll continue to reply. Then we can set the standard for how you'd like to be treated.

Joe Konrath said...

I've been addressing the fact that Hachette doesn't have it within its power to make Amazon remove pre-order buttons or delay orders.

You lost me here.

This is a negotiation. Both parties are accountable.

Let's say I've always been the primary cook in my marriage, and my wife has been the primary shopper. If my wife suddenly stops shopping, I have nothing to cook, and I may resent the fact that I have to do both the shopping and the cooking. So I try to work out an agreement where I shop, and she cooks. She may counter by saying she wants to cook some days, and shop some days, but I prefer she only do one or the other.

In the meantime, as we figure this out, the cooking and shopping aren't getting done. So maybe it escalates. I stop cleaning up after myself. She stops being affectionate. I start ignoring her. And, naturally, the children suffer.

It takes two to tango. Hachette could end all of this right now. They value their negotiation position more than they value their authors. Considering we don't know the facts on who escalated what, or what the terms are, we can't say Amazon wasn't justified in removing pre-order buttons.

If Hachette is trying to force the agency model on Amazon, Amazon is VERY justified in whatever they do. The agency model will raise prices and hurt authors. Amazon has a right to sell things the way they want to. It's their company.

Joe Konrath said...

Hachette cannot remove a pre-order button from Amazon's site.

Hachette can put Amazon in a position where Amazon feels that is it's only recourse. We don't know the details.

Hachette cannot force Amazon to reduce the stock it keeps on hand.

Amazon has no obligation to Hachette to keep stock on hand. They said they are filling orders as fast as Hachette can ship them. It's Hachette's problem that their distribution system is archaic and sucks.

Hachette cannot force Amazon to raise prices on specific titles.

Amazon raised prices to HACHETTE'S SUGGESTED RETAIL PRICE. You know, the one printed on the book.

Hachette cannot make Amazon suggest alternative products.

Amazon always suggest alternative products, on every Amazon page.

Those are all things that Amazon has chosen to do. That's irrefutable

Seems I just refuted all of it.

Anonymous said...

Anon (TP) to Anon (the one in a dispute with Dan)

You didn’t understand what I was trying to say. Joe explained it pretty well, but I'll do it in my own words.

Your argument seems to be: Only Amazon can remove the pre-order buttons. Removing the pre-order buttons harms the author’s careers. The pre-order buttons are gone. Therefore, Amazon is harming the author’s career.

You also said that my comment: "They haven't come to an agreement because Hachette is trying to force terms on a supplier that the supplier doesn't want, and the supplier is resisting” 
implies that the negotiation is in only one direction, and that only one party holds any power over the other. If I turn that point around and say that Amazon is trying to force terms on Hachette that Hachette doesn't want, it makes Amazon seem more aggressive. But it's a two-way street, and both companies are entitled to fight for their own best interests. The fact remains, however, that Amazon's actions in response to the dispute are the ones that have gotten the media's attention.

It is not a two-way street. Amazon is the retailer, Hachette is the supplier. Amazon gets to decide what terms it wants in its store. If there is no agreement (see Amazon’s statement) it is because Hachette wants Amazon to sell its products under terms Amazon doesn’t want.

Yes, Amazon may want to sell Hachette’s products under terms Hachette does not want.

But Amazon cannot force Hachette to sell books in its store. Hachette cannot force Amazon to sell books under terms it does not want.

When Amazon removes the pre-order buttons, Amazon is saying, “I will not sell books in my store unless I like the terms.”

So yes, Amazon has removed the pre-order buttons, but to accuse Amazon of engaging in behavior which harms writers is like my cabinet company saying, “Retailer A is harming our carpenters by not cabinets at the terms we want.”

Thanks for allowing anonymous postings, Joe. I can not post under my real name because doing so could be detrimental to my traditional career.

Anonymous said...

Anon TP

One more:

Suppose Hachette walked away and said, "We're not selling our books under Amazon's onerous terms. It's either agency pricing or nothing."

Wouldn't it be silly for Amazon to say, "Hachette is harming our store by taking away our biggest account."

It's equally silly for Hachette to say, "Amazon is harming authors by not selling our books at the terms we insist on."

Right now, the agreement in place is the agency agreement Hachette achieved through collusion.

It's time to renegotiate the agreement.

My guess is that Amazon doesn't like the current agreement much. Hachette likes it a lot.

Hachette wants things to continue on. Amazon doesn't.

If Amazon pulls the plug, spinning it as "Amazon is harming writers" is manipulative and bullying.

Kit Power said...

"If the book is finished, there is zero need for a pre-order page.

In the digital world, getting the ebook live as soon as it is finished is a no-brainer. Every day it isn't live is a day it doesn't sell. Some people just don't like to pre-order.

If it's done, publish it."

Damn it Joe, every time I come here you say something that messes up my thinking! I'm delaying release of my first self-pub'ed title until August to make sure I get as many 'week 1' reviews from book review sites (that cross post to Amazon) as I can, hoping that'll build some week 1 buzz/sales momentum (hey, no idea if it'll work, I'm just trying shit out). For that reason, I'd appreciate a pre-order button, and would be happy to have the book uploaded in advance of release.

Joe Konrath said...

Thanks for allowing anonymous postings, Joe. I can not post under my real name because doing so could be detrimental to my traditional career.

That's why I allow it.

There are cases where positing under your name can come back and hurt you. Not because other posters will stalk you, but because it is hard to criticize the company who can tank your book by just being stupid or lazy. Why give them a reason to on top of that and add to your woes? :)

Joe Konrath said...

Right now, the agreement in place is the agency agreement Hachette achieved through collusion.

Incorrect. Right now it is a straight wholesaler agreement. the DoJ made the 5 colluders change models. But now they are free to negotiate independently.

If memory serves, Random House is the only one with agency pricing (along with KDP authors) because Random House negotiated separately from the other 5.

Right now, I'm guessing Hachette is pushing for agency again. That's just speculation, but it fits.

Joe Konrath said...

I'm delaying release of my first self-pub'ed title until August

You're missing out on sales between now and August.

I can understand wanting to launch big, with a lot of reviews, but I wouldn't do that at the expense of missing sales.

Anonymous said...

(Anon TP)

Interesting. I also think Hachette is pushing for agency. When I read both Amazon's statement and Hachette's statement, that's what seems to be between the lines. Combine with the industry insider opining that only agency will keep Amazon from getting too big (I understand the fear in a supplier who has to depend too much on any one retailer) and keep paper books alive.

I also have a feeling that Amazon wants to put an end to windowing.

I think Hachette is facing a pretty horrible choice: Agree to give up agency and what their avenues for distribution diminish, or walk away from Amazon and scramble to mitigate the loss of their largest retailer.

Anonymous said...

Error: I meant "watch their avenues of distribution narrow"

Giving up agency, according to industry experts, will greatly reduce their long term profits and strength.

Giving up Amazon will force them to scramble for new avenues.

I can see them taking the second option if they truly feel ending agency is a slow demise, particularly if they think they may lose Amazon but win a huge publicity war.

Alan Tucker said...

It's extremely difficult not to get emotional when your livelihood becomes uncertain. I think we should all try to keep that in mind as we discuss these issues and respond to those who seem to say silly things or defend those we deem to be indefensible.

Art and business generally don't play well together.

Joe's exactly right when he points out that bigness attracts jealousy and hatred. Most people seems to have forgotten when Barnes & Noble was the big, bad bully by squeezing out the mom and pop bookstores and *gasp* Waldenbooks and Borders — remember them? Now, Amazon is the largest retailer for books and thus, all our David vs. Goliath ire is directed at them. Everyone should take a step back and examine history before pointing fingers and crying, "Witch!"

The solution is so simple, really. All we need to do is compare the weights of Amazon and a duck. If they're the same, then we'll know for sure ;-)

Anonymous said...

Anon at 5:41 again (probably for the last time today as I'm going offline to attend to real world issues)

Joe - First of all thank you for answering my original question in an open, thorough and honest way.

As for refuting my irrefutable points: You made opposing arguments, but haven't refuted anything. To refute means to disprove. In some cases, you've merely explained why Amazon has done something, not even argued that it hasn't. My main paint hinges on Amazon's opening paragraph in their statement:

"We are currently buying less (print) inventory and "safety stock" on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future. Instead, customers can order new titles when their publication date arrives. For titles with no stock on hand, customers can still place an order at which time we order the inventory from Hachette -- availability on those titles is dependent on how long it takes Hachette to fill the orders we place. Once the inventory arrives, we ship it to the customer promptly. These changes are related to the contract and terms between Hachette and Amazon."

They clearly state that they are letting stock run low, and run out altogether, and ordering from Hachette in response to purchases from customers. You can argue that they fell forced to take this stance, but the problem is you don't get to apply that argument selectively. This is high stakes stuff, and Hachette aren't doing it for the laughs either. The cold hard reality is that Amazon has chosen the tactic of running low stock, thus delaying orders for its customers. Their reasons for doing so are another matter entirely; I pass no comment on the ethics or wisdom of that move. It is what it is.

As for suggesting other products, Amazon has reportedly been displaying banners suggesting alternative products at lower prices specifically to discourage customers away from Hachette books. This not the same idea as a 'Customer also bought' strip lower down the page, so your comparison doesn't really stand.

As for what's going on behind the scenes, we know there is no agency model agreement currently in place because the DoJ ruling prohibited it. But speculation that Hachette are pushing for the reinstatement of an agency model seems well founded to me.

This is a big deal for the industry. The DoJ ruled that the publishers could try for agency deals again after two years, but staggered over time. It seems likely that the other big publishers are watching with baited breath because if Hachette backs down, the rest will be in a much weaker position. If Amazon back down, however, then the publishers' positions are greatly strengthened.

TP Anon makes good points about Hachette's choices, but it they can just hold out until the next publisher is pushing for agency, then they might stand a better chance. And if they hold out for the third publisher, and so on and so on...

More below...

Anonymous said...

Continued...

On the surface, it seems Amazon's dominance is purely a supplier's problem, that the customer isn't affected. But that's entirely wrong.

One of the main flaws of competition laws as they were applied in the Amazon/Apple DoJ ruling is that focuses on price being the main benefit to the consumer that must be defended. Problem is, whe it comes to retail discounting, cut prices are usually an illusion.

I've worked in other retail fields, and the same thing happens in every one of them. When a retailer gains a disproportionately large share of the market, so large that it can wield excessive power over its suppliers, it can and will push for ever deeper discounts. But the supplier has only so much discount it can give. All they can do in response is artificially inflate retail prices so that a greater percentage discount can be conceded to the mega-retailer. Ultimately this means the customer doesn't get the product any cheaper, but smaller retailers are shunted out of the market because they are saddled with the inflated price.

I'll give you a specific example: I know several authors who are much bigger sellers than me. I do well, but I'm not in their league. Take Big Author's new book. It's hardcover RRP in the UK might be £19.99, whereas mine, with the same number of pages, will be £12.99. The handful of mega-retailers will insist on deeper discounts for stocking bigger quantities of the first book, but they'll be starting from a higher price because the publisher just doesn't have the margin to give those discounts without inflating the RRP. So when a customer actually goes to buy my book and Big Author's, they'll end up paying about the same price. The perceived value of the discount is purely an illusion.

The harm to the customer, however, is the removal of choice in where they can purchase the book as there will be fewer outlets. The harm to me, as an upper-midlister, is lower discoverablility as there are fewer outlets to stock my books. The only one who benefits is the mega-retailer because they corner more of the market.

This is why the industry is so nervy about giving Amazon too much power, Words like monopoly are thrown around, which Amazon is not, but their dominance in the market is distorting both the supply and retail ends of it.

And yet more...

Anonymous said...

Anon TP

Anon said: "TP Anon makes good points about Hachette's choices, but it they can just hold out until the next publisher is pushing for agency, then they might stand a better chance. And if they hold out for the third publisher, and so on and so on..."

They can't hold out for the next publisher. That's what the DOJ is not allowing. That would be two publishers ganging up, or colluding.

I'm pretty sure the DOJ settlement requires one publisher at a time to negotiate. Which means publisher #2 isn't up to bat until Hatchette is finished.

Right everyone?

Anonymous said...

Continued again:

Amazon's dominance is a problem for indie authors too. As it stands, Amazon is the bulk of your market. But what happens if the pressure on Amazon to start returning real profits becomes too much? A few hypothetical scenarios:

1) Indie publishing is one of the few areas where Amazon makes a decent profit. What if they decide they need to make more out of you? If they are the dominant force in your market, who do you turn to when they want 50% of your price? Or they start dictating what price you can sell your books at? Or if they implement a pay-to-play set up where indie authors can buy greater visibility if they're willing to put the money down? All of those are feasible, and I'd be shocked if they haven't been discussed in Seattle. Remember, eBay has been pressing its sellers over the last few years.

2) What if Amazon implodes? If the last few years have taught us anything, it's that there's not such thing as too big to fail. If shareholders run out of patience with Amazon's inability to turn their huge turnover into actual profits, the company is in an extremely precarious position. It really isn't beyond the realms of possibility that Amazon could collapse, or broken up, or sold off.

I'm not saying those will happen. I certainly don't want to lose Amazon either as an author as a customer, but you can't ignore the dangers of them swelling to fill the market.

And that's all for now.

Anonymous said...

(Anon TP)

Anon said "The harm to the customer, however, is the removal of choice in where they can purchase the book as there will be fewer outlets. The harm to me, as an upper-midlister, is lower discoverablility as there are fewer outlets to stock my books. The only one who benefits is the mega-retailer because they corner more of the market."


The DOJ isn't worried about one retailer becoming too large. As everyone has pointed out, being a monopoly is not illegal.

There is a solution to one retailer becoming too large: Someone else has to figure out how to compete.

Amazon is, at heart, a high tech company. One mistake people trying to compete are making is that they don't understanding what makes Amazon successful. Amazon is successful because of it's algorithms -- its codes, it's website. It has figure out the technical side.

It's a dot com company that soared.

Amazon developed an amazing website which is allowing it to become the dominant retailer. Someone else needs to figure out how to sell better than Amazon does.

The way to limit Amazon is for someone to figure out how to compete with them.

Someone will. Eventually.

Crying "amazon is hurting me by not selling my product on my terms" is not the way to limit Amazon.

Anonymous said...

5:41 to TP.

"I'm pretty sure the DOJ settlement requires one publisher at a time to negotiate. Which means publisher #2 isn't up to bat until Hatchette is finished.

Right everyone?"

I had believed that it was staggered, but dependent on one finishing before the other starts. But I could well be wrong, and am happy to be corrected. It makes it all the more important to the other publishers that Hachette stands its ground.

This is all assuming they're pushing for agency, which we don't actually know. It's still speculation at this point.

Scott said...

Forgive me for my ignorance, but I'm not sure I understand exactly what "Agency" is. I assume wholesale is a situation where the retailer buys the book at a discount off the MSRP then sets their own price. So a 10 dollar item might be bought for a discount of 40% (or 6 dollars) and then sold by the retailer for whatever price they want (up to 10 bucks, since that's the price printed on the item).

In "agency" pricing, what happens? The item is sold at full price and then the retailer pays a set percentage of the price to the supplier? Is there another place where this model is used?

Thanks...

Anonymous said...

Sorry, meant to say "but *not* dependent on..."

Anyway, I'm off.

Joe Konrath said...

Giving up agency, according to industry experts, will greatly reduce their long term profits and strength.

Publishing didn't even have agency pricing as an option until 2010, when Apple told them to do it. Prior to that, for decades of publishing, there was only wholesale pricing.

Alan Spade said...

I think all the indies who are following business publishing understand the Macmillan vs Amazon battle in 2010 was just a preliminary fight. The real battle begins here.

"I'm pretty sure the DOJ settlement requires one publisher at a time to negotiate. Which means publisher #2 isn't up to bat until Hatchette is finished.

Right everyone?"

What I would like to know, and perhaps the question has already been asked on the Passive Voice blog, because Passive Guy is a lawyer, is, what would happen if Hachette removes all its products from Amazon? And then, a month later, without even entering into negociations, Random-Penguin does the same? And a month later, S&S, and later, Harpercollins.

Would the DOJ have the right to say the Big 5 have colluded again?

If, as it is my theory, a commercial war has begun, we should expect radicalization. A communication war has already begun, by the way.

Anonymous said...

(Anon TP)

Scott, here is an explanation of agency:

http://blogs.wsj.com/digits/2012/04/11/what-is-agency-pricing/

Publishers like agency because Amazon cannot discount, so Amazon has no competitive advantage over other retailers, so other retailers (like Barnes and Noble) can thrive, and publishers don't have the horrible feeling of being entirely dependent on a single retailer who happens to be hostile to the very idea of publishers (Bezos doesn't think gatekeepers are necessary for arts to thrive)

When the major publishers got together and demanded agency, Amazon had to cave. The result was instantly ebook prices went up.

The ebook prices going up brought in the DOJ who claimed the publishers colluded to fix (and raise) prices.

Publishers made lots of arguments including those made by Anonymous 5:41, that the bad guy was Amazon who was getting too big.

By the way, settling is not necessarily an admission of guilt: It can also be an acknowledgment that the trial and fight is not worth the cost. So without a trial and fact finder, I don't think we can say the publishers were guilty of collusion.

But the settlement forbids them to collude -- or act in unison.

Joe Konrath said...

The cold hard reality is that Amazon has chosen the tactic of running low stock, thus delaying orders for its customers.

Is Amazon really the one responsible for delaying delivery times because they have chosen to run low on stock?

We can play semantics here, and debate the burden of responsibility. Amazon sells hundreds of thousands of items that don't ship from its warehouses. These vendors ship on their own, not via Amazon shipping.

Amazon is putting the onus on Hachette for delivery times.

Whereas when Amazon stocks books it can ship quickly, it is now passing along the orders as it receives them to Hachette, who cannot ship quickly.

So I can argue that Amazon is not delaying customer orders. They simply aren't facilitating them as they had in the past.

Not the same thing. If I fail to prevent a crime, it is not the same as committing a crime.

I can argue that Hachette is the one delaying orders because they aren't shipping directly to customers like a vendor would, and it is doubtful they ship to Amazon immediately as orders come in because they probably wait for several to accrue.

If Amazon had a book in stock, had an order, and sat on it for a week, I'd call that Amazon delaying a sale. They aren't doing that. They're waiting on Hachette.

The reason why Amazon is waiting on Hachette is because Amazon isn't stocking books, but that doesn't negate the fact that Amazon is waiting on Hachette.

Let's try an analogy. I cook dinner for my family nightly at 7pm. I ran out of onions because I didn't order any, so I send my son to the store to get onions.

Am I the one delaying dinner because I didn't have any onions?

My family could get dinner without me. I could say the onus is on them. Why should I be forced to make dinner?

My son is the one getting the onions. I could say the onus is on him. Why can't he go any faster?

Semantics. If you believe that Amazon is the delay, I can suggest plausible reasons why Hachette is the delay.

But I think we both understand what's happening. Both sides are flexing muscles to get their way in the negotiations. Amazon's muscles may be bigger.

Joe Konrath said...

As for suggesting other products, Amazon has reportedly been displaying banners suggesting alternative products at lower prices specifically to discourage customers away from Hachette books.

Practically every Amazon page has competing products on it, via advertising.

If you walk into a Best Buy and go to the TV department, there are a hundred models, side by side, competing with each other.

It's the same thing in a brick and mortar bookstore. Except in a B&N, Lee Child has 40 books on the new release table, heavily discounted, while I have one hardcover spine out in section, no discount. ;)

I don't have much sympathy for Hachette is Amazon is, indeed, displaying competing products at lower prices. Welcome to the wonderful world of being a midlist thriller author.

This is a big deal for the industry.

Agreed. And thank you for posting here. I love it when people don't agree with me. And to do so in a considerate, even-handed matter is a bonus. Kudos.

Joe Konrath said...

When a retailer gains a disproportionately large share of the market, so large that it can wield excessive power over its suppliers, it can and will push for ever deeper discounts.

That's the fear. But you have to show Amazon doing that in order to justify it.

Amazon has, since its inception, tried to keep its prices as low as possible. But it also has tried to have as wide a selection as possible. While squeezing suppliers is a possibility, if those suppliers cease to exist because they can't make a profit dealing with Amazon, then Amazon won't be able to offer those good anymore.

Unless those goods are from a middleman who takes a big cut, like a publisher. If Hachette goes out of business, Amazon customers won't be prevented from getting those authors' books--those authors can deal with Amazon directly, which will lower ebook prices while the authors earn higher royalties.

Could Amazon someday squeeze authors in the same way? Sure. They just cut ACX royalties.

But as I repeatedly said, I'm not going to live my life fearing the meteor will hit earth. I'll wait for some evidence first, and in the meantime I'll diversify and consider alternative publishing opportunities.

Joe Konrath said...

The harm to the customer, however, is the removal of choice in where they can purchase the book as there will be fewer outlets. The harm to me, as an upper-midlister, is lower discoverablility as there are fewer outlets to stock my books. The only one who benefits is the mega-retailer because they corner more of the market.

That's a good argument, but I think there is a good counter argument.

Fewer outlets don't mean the removal of choice when it comes to Internet shopping.

If it is 1987 and my town's only bookstore closes, my book buying choices become very limited.

In 2014, I don't need to be in any brick and mortar stores. I can self-pub ebooks in multiple online stores that cater to the nation, and the world. My ebooks will no doubt be priced equally at all of these etailers, and every customer has equal access to all of them.

Unless I'm mistaken (and I may be), cornering the market involves supply and demand. Ebooks aren't subject to supply and demand. They aren't limited, and there are no costs to ship or produce them.

I haven't done enough research, but I think the term "technocapitalism" is applies. http://en.wikipedia.org/wiki/Technocapitalism

I blogged about something similar in 2011
http://jakonrath.blogspot.com/2011/03/ebooks-aint-bubble.html.

I'm considering taking the technocapitalism concept forward and inventing my own definition for an IP that doesn't require manufacturing or shipping, doesn't heed to supply and demand, but is protected by the government in the
form of copyright.

Maybe something like "Viral Capitalism"? It can replicate itself, given the raw materials and medium, earning forever.

A virus (in this case an intellectual property like an ebook) requires transmission (the internet), a carrier (etailers like Amazon), a medium (an
ereading device), and a host (readers). The raw materials it requires to replicate are the IP itself, and then fixed costs for formatting, editing, and cover art.

Just spitballing off topic, but it is one that fascinates me.

Joe Konrath said...

Indie publishing is one of the few areas where Amazon makes a decent profit. What if they decide they need to make more out of you?

They have a right to. I wouldn't be happy about it, and I'd be vocal in my displeasure.

But I've got back-up plans, as I mentioned earlier. Years ago I decided I didn't want to be at the mercy of anyone anymore when it came to my IPs. So I'm taking steps.

Or they start dictating what price you can sell your books at?

That's the wholesale model. I'd e fine with that. In some ways it's preferable, because then Amazon can discount my titles and still pay me my set wholesale price.

Or if they implement a pay-to-play set up where indie authors can buy greater visibility if they're willing to put the money down?

You mean my ads haven't shown up on your book pages yet? :)

All of those are feasible, and I'd be shocked if they haven't been discussed in Seattle. Remember, eBay has been pressing its sellers over the last few years.

You're making good points. But again, I don't conduct business worrying about what Amazon might do. Instead I take things as they come, while working on my own plan for world domination.

Joe Konrath said...

What if Amazon implodes? If the last few years have taught us anything, it's that there's not such thing as too big to fail.

It's possible. But when a market leader implodes, the vacuum it leaves gets filled by others immediately.

I'm not tied to a publisher. I own my IPs. I can move fast. There is a proven demand for ebooks. If not Amazon, someone else will fill that need, and I won't be dependent on the Big 5 to figure it out for themselves and then drag me along.

Veronica - Eloheim said...

I actually am far more concerned about Facebook than I am about Amazon.

I use FB for most of my advertising and connection to new clients.

FB makes wacky, annoying, and confusion-causing changes ALL the time.

Right now, I haven't found a better option. I don't like that and I seek new solutions all the time.

FB wasn't always here and won't always be the only game in town.

Perhaps Amazon will start making changes that drive Indies to new solutions. Perhaps not.

I stay informed, keep my eyes open, and keep creating all sorts of new products which decreases my dependency on any one site or retailer.

Joe Konrath said...

I don't think we can say the publishers were guilty of collusion.

Macmillan and Apple are still fighting the charges. We'll see.

But we've heard enough evidence (including the famous "double-delete emails") to know the publishers were communicating with each other and Apple, and then all approached Amazon at close to the same time. Except Random House, who was wise to wait.

Claire Chilton said...

If the book is finished, there is zero need for a pre-order page.

Thanks for the reply. I completely agree with that statement. As an indie who's had pre-orders, I really couldn't fathom the use for them. Selling well on release day is more important to overall ranking imo.

I only commented because someone else asked about having them. But why do people want pre-orders then? I don't understand the need for them at all. In my experience, having a pre-order button went something like this:

Me: 'Oh look, a pretty button. Hey fans, I have this pre-order button.'

Fans: 'Yeah, it's pretty. I'll buy it when it comes out.'

Me: 'Okay then. Thanks, any sales work for me. I'll just look at the pretty button for a while then write my next chapter for you.' *polishes the untouched button*.

That could just be me though. I guess big publishers get something more out of that button. But as indies, you'd need a teaser campaign, fans gagging to buy the book, perhaps a special edition (like some games have to make pre-orders worth buying) the build up, the queue of people lining up at midnight to get a copy...

Aren't those days dead and gone on books now? More importantly, you can't create that kind of condensed buzz in a specific location on the internet. There's too much other information floating around to have an impact.

Anonymous said...

Whenever I read a comment about "what if Amazon does x to self-publishers" I'm thrown off. Are people laboring under the illusion that self-publishers have signed off their IP to Amazon?

Worst case scenario, the market would go into a period of flux with more competitors coming to the fore. Maybe fewer sales as the market adjusts, but never anything as impact-ful as selling your IP to a third party for life.

John Ellsworth said...

There's so much anonymous flying around here, i feel like I'm at a 12 Step meeting of AA (Authors Anonymous).

But one anon really helped me understand what the agency model is all about

Anonymous Anonymous said...
(Anon TP)

Scott, here is an explanation of agency:


That was lucid and very helpful. Thank you, Anonymous.

Good blog. A lot for Newbies like me to absorb.

Joe Konrath said...

Whenever I read a comment about "what if Amazon does x to self-publishers" I'm thrown off.

What if all the major publishers agreed on the exact same royalty rate and prices for books? Authors couldn't get better rates no matter where they went, and all refailers could be forced to sell books for the same price, eliminating competition via discounting? Does that sound fair to authors or retailers?

Oh... wait.

If one company does that, it's legal. But when all companies in an industry do it...

Hollis Shiloh said...

I admit to pre-ordering some titles. But sometimes I regret it and wish I'd read a sample first. There are a few indie authors I'd definitely pre-order from, but they're likely to get my dollars either way, and if it doesn't increase their ranking anyway...

This is a very interesting conversation to me, perhaps most of all because I don't have a dog in the fight so I can just sit back and listen and learn.

I've still never figured out what IP stands for, though. IPs apparently means the stories you write and sell. But I've never figured out what the letters stand for.

Joe Konrath said...

Intellectual Property.

Talin said...

IP means Intellectual Property.

Hollis Shiloh said...

Oh man, that shouldn't have been a difficult one! Thank you.

Anonymous said...

Perhaps an example from outside this industry might be entertaining. Or not, you be the judge. It's a little long, so I'm chopping it into two parts. At least it’ll offer some comparisons.

Before self-publishing, I used to work for a company that made things sold to consumers through hardware stores, like Home Depot, Lowes, Ace Hardware, etc. Think widgets.

I don’t know how familiar you are with how the process works, but bear with me as I try to describe it: Everyone who makes widgets wants to sell as many as they can. Getting their products into Home Depot or Lowes is the way to sell the most, because of their large customer base. But to sell your products at retailers like Depot, Lowes, or even Walmart, you don't just list your product somewhere and expect Depot to pick it up and sell it on their website, or stock it in their stores. You have to make a "pitch" to a Depot buyer. For my company it was an annual event, a big presentation everyone prepared for, where a lead salesperson described in detail to the Depot “buyer” why your product was superior, why Depot customers would consider it value-added, and why you were a reliable vendor who would fill orders without delays or hassles. You had to agree to onerous return policies that clearly favored Depot. But most of all, you had to price it to Depot correctly. If you priced it too high, they would simply decline to carry your product. If you priced it too low, you'd lose a lot of money at the volumes Depot would deliver. Sometimes the lowest price you could offer and make a small profit was still more than Depot was willing to tolerate. In these cases, you simply didn't receive orders from Depot. They'd go with someone else, or just not carry your product at all. There was no weeping, wailing, or gnashing of teeth if it didn’t work out. No public whining about Depot. You just tried again next year. Maybe you’d fire the salesperson who presented to Depot, so you could send in a fresh face next year. Maybe Depot didn’t like their hair, or their breath. (I am not shitting you – these things would be considered.)

And it worked exactly the same way at Lowes, Ace, True Value, all of the major hardware stores. Pitch, price, and hope they took you. HOPE. They didn’t have to.

These hardware store chains weren't stupid. They’d keep an eye on each vendor, and figure out what percentage of the vendor’s overall profits came from sales through their chains. This told them how much leverage they had over each vendor as they did more and more business with them. When a company makes 50% of their profit through sales to Depot, guess who controls pricing? The annual “pitch” meeting turned into a very short meeting where Depot simply handed you a sheet, telling you what your products would be priced at for the next year.

Unethical? Hardly. If you think it is, you don’t know how business really works. He who controls the profits controls everything. Short -sighted companies enjoyed making tons of dough selling through these chains, right up until the time they realized Depot now controlled the pricing, and could raise and lower it at whim. They found themselves Depot’s (or Lowe’s, or Walmart’s) bitch. I saw it happen several times. They didn’t like being Depot’s bitch, but they did like the cash flow, so they learned how to deal with it.

And Depot would take it further. Play one vendor off another, so they all tried to underbid the other. Require vendors to attend mandatory “humiliation camps” where they’d subject them to ridiculous meetings and embarrassing team-building events that were designed to reinforce to the vendor that Depot was in charge. At the time (early 2000’s) Depot felt it was in their interest to beat up on vendors. It kept them compliant. I don’t know if they still do this, but they certainly used to.

Continued in part two...

Anonymous said...

Continued from part one...

I don’t recall anyone rising up in arms, claiming Depot was destroying America. It didn’t make the NYT or The Daily Beast. Suppliers to the vendor didn’t claim Depot was the villain – if they blamed anyone, they blamed the vendor for not pitching or pricing right. Most suppliers to the vendor didn’t care, since they already got paid – the vendor was the one caught in the middle. But many suppliers became as dependent on the vendor as the vendor was on Depot.

Depot had every right to choose what it wanted to sell, and if a vendor didn’t like it, they could take a hike. It really pissed off some businesses that weren't smart enough to not put all of their eggs in one basket. It also made many of them huge and rich.

Why did Depot put the screws to vendors this way? Because they were in competition with other hardware stores, and they knew that their customers would buy items at a lower price elsewhere, if they didn’t keep their prices down. No one gives a shit if the widget came from Depot or Lowes or Ace, they just care how much they paid for it.

Now I know books are not a necessity of life, even though at times I feel like I need them to live. They don’t taste good, and choosing to live under them to shelter myself from the elements might work in some climates, but it would be a bad idea here in Seattle.

Are books different than some widget you get at the hardware store? Sure. BUT THE MECHANISM THEY SELL THROUGH IS EXACTLY THE SAME. It’s the same free market capitalism, the same big retailer structure, the same supplier/vendor relationship, the same shareholders of the retailer demanding growth and profits.

So I’m a little amused by those who seem to think Amazon should be acting as though it is NOT part of corporate America. Because it’s selling books, they seem to think, the rules should be different: if what you’re selling has cultural significance, Amazon should forego its responsibility to shareholders and bend over whenever a vendor requires them to. Depot doesn’t have to, Lowes doesn’t have to, Walmart doesn’t have to, but Amazon does, because of what the product it’s selling? Huh?

It’s na├»ve and seems like something only people who don’t know how wholesale/retail sales really work would entertain. I see some authors say they prefer traditional publishing so they can just focus on writing. OK, then shut up when the business side of it rears its ugly head. Go take shelter until the crisis is over, or take the time to learn how things work in the real world. Neither side is a villain; Amazon simply holds better cards than the publishers do. Both sides have every right to try and improve their terms and agreements. But PLEASE don’t whine on and on about it being unfair or that laws should be passed that would disadvantage retailers and create special rules for a particular industry. You just sound like someone who has their head in the sand, unaware of how things really work.

And I guarantee you NO hardware retailer would EVER create a fund to help suppliers of vendors for the hardship caused by the retailer choosing not to carry the vendor’s products. It’s bizarre to even consider because it’s so far removed from the norm. But it tells you how “special” the traditional publishing industry views itself. It’s crazy that they didn’t jump at Amazon’s offer to share a pool. Free money for the vendor’s suppliers? Any real-world vendor would have to pick their jaw up off the floor before they quickly accepted that offer.

This kind of “specialness” breeds delusion, and it’s often deadly in business, like when Dish bought Blockbuster in 2011. Perhaps that’s why they didn’t take Amazon up on the pool; some delusion on their end that they have a winning hand. I’m reminded of Saddam Hussein’s press secretary declaring that they were winning the war.

Hope this detour into the world of hardware sales wasn't too boring. Sometimes the real world is.

Anonymous said...

http://www.vulture.com/2014/05/james-patterson-calls-out-amazon-at-book-expo.html

Check out that link. Today, at the BEA, Patterson told his audience (publishers and editors) that if Amazon gains too much control over publishers, art and literature and culture will suffer.

Bezos says gatekeepers hinder culture.
The gatekeepers think they preserve culture.

So you have an added problem right there. I don't think big publishers take kindly to being told they are hindering culture. They genuinely believe Amazon is hindering culture.

What makes this interesting is that personal element which isn't present in the hardware store example.

Joe Konrath said...

It’s crazy that they didn’t jump at Amazon’s offer to share a pool. Free money for the vendor’s suppliers? Any real-world vendor would have to pick their jaw up off the floor before they quickly accepted that offer.

Good example, and I agree.

I have a few answers why publishers didn't jump at Amazon's offer.

First, because publishers once had all the power. They were a cartel that controlled distribution. If you were an author and wanted to get into bookstores, you had to go through them. If you wanted to sell books to customers, you had to go through them (or their distributor). They had contracts that were the same among all authors and vendors, except for minor differences (like advance amount or bulk discounting). It didn't matter if you were dealing with Hachette or Macmillan or Random House, they all played by the same rules.

After decades of this, publishers began to feel entitled to their fortunes and their power. They were gatekeepers, making dreams happen for a few lucky writers.

Now they aren't needed anymore. They used to be in control, now Amazon is controlling them. And they hate it and won't accept it. Not only does Amazon control the paper market--which publishers used to have a quasi-monopoly on, Amazon also invented the modern popular ebook market, which means they call the shots.

On top of all the feelings of anger and loss of control, publishers have never respected authors. They've treated them like replaceable cogs in a machine. They don't mind playing the "look at our poor authors" card for the media, but actually give authors money out of pocket? Unheard of!

And since authors continue to submit to them (with all meanings of the word "submit"), publishers see no need to treat authors any better. And the stupid authors continue to suck up to publishers.

Publishers had their run. It's over. And they can hate it, and bitch and moan, and cry unfair, and it doesn't model. The old way is dying. A new alpha predator has arrived, and it's eating their market up. And publishing folks continue to be in denial. They've ignored me for five years, and the threat I've repeated--a threat which now has widespread data to confirm it.

Authors don't need publishers anymore. And many aren't bothering with them. And those numbers will increase.

B&N will close. The midlist will crumple. And publishers will have a handful of bestselling authors supporting their entire infrastructure.

Anonymous said...

Boy, the factual inaccuracies in that Patterson quote are alarming. And the hyperbole! It's like watching Fox News. I'm surprised people don't run out to their local bookstore with guns and defend it against Jeff Bezos all Bunkerville-style!

Hairhead said...

To anonymous @ 5:42pm.

Thank you very much for explaining, in crystal-clear terms, what large-scale purchasing and retailing is like. I knew all this, having worked in retail, and as a writer done business plans, but I didn't take the time to put it all down so clearly.

Good for you, and do you mind if I cut-and-paste your post and put it up on Saint's and the SF writer's blogs?

I'll wait for your permission. And if I get it, and do this, I'll report whether or not they post it, and if so what comments they get.

Maia Sepp said...

Anonymous Home Depot guy/gal, I think I'm in love with you.

Anonymous said...

Hairhead,

Sure, feel free to repost.

Maia,

:)

~anonymous @ 5:42pm.

Dan Meadows said...

Amazon can do that because their contract with Hatchette, that Hatchette agreed to, allows them to. (Or so Amazon says in their statement, anyway, but I suspect its true or there'd be breach of contract lawsuits threatened, I'm sure).Is Hatchette not in the habit of taking advantage of things in their contracts when they see it in their interests? It's the same principle. I tend to look at root causes of things in business matters. Yes, Amazon took this action but Hatchette allowed it to happen by not negotiating any protections against it. I've been screwed in the past by places I've signed contracts with, in ways that didn't violate the contract, but I didn't blame them. I signed the contract. I just didn't do business with them anymore after that contract was up and was more vigilant about contract terms in the future. Whatever someone else's actions, so long as they don't actually violate the contract, I put myself in that position and the responsibility for the consequences falls squarely on me. I look at Hatchette saying "it's not my fault" and I can't help but think it's terribly unprofessional and more than a little disingenuous.

Dan Meadows said...

As a writer, I find the argument that literature and culture will suffer if publishers die off personally insulting. And I'm notoriously difficult to insult.

Jennifer Oberth said...

In regards to pre-orders, couldn’t Amazon have a statement that if you (buyer) pre-order, the publisher (meaning TP or self) is responsible for delivering the book at the stated publish date? That way, Amazon doesn’t have to worry that they’ll be blamed for not delivering – it’s on the publisher to do so. Customers pre-buying the book would know that it’s up to the seller (publisher) to provide the goods. Amazon is simply the cashier. If the customer doesn’t trust that the book will be published (or delivered on the date specified), then don’t pre-order. That’s what I’d do if I were Amazon.

It’s like Kickstarter and eBay.

Jennifer Oberth said...

Two more points:

If Amazon is throwing its weight around and being a bully by taking the pre-order button away and buying less stock, then it isn’t working. You would assume they’d do it to make Hachette’s customers (authors) lean on Hachette to come to a deal with Amazon. All Hachette and its authors are doing is blaming Amazon. So, it’s either not true that Amazon did that as a tactic or it backfired.

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

“Amazon's dominance is a problem for indie authors too. As it stands, Amazon is the bulk of your market.”

Just to make a counterpoint, Amazon is NOT the bulk of my market. Smashwords is, specifically Barnes and Noble. That’s where the bulk of my sales come from.

I wanted to point this out because anonymous 5:41 complained about someone making blanket statements that didn't fit him/her and this is a blanket statement that doesn't fit all self-published persons.

“What if they decide they need to make more out of you? If they are the dominant force in your market, who do you turn to when they want 50% of your price?”

Smashwords.

I don’t understand why Smashwords isn’t as big or bigger for readers/authors than Amazon (or B&N or Apple...). Amazon has made themselves less attractive by pushing for exclusivity. For authors/publishers, they're pushing KDP Select. With customers by not using epub.

As a customer, I buy as many books as I can from Smashwords over any other retailer because my tastes can be fickle. Today, I own a Nook. Tomorrow, I might want to buy another ereader - if I buy ebooks through Amazon, I'm stuck with also buying their ereaders - forever. If I buy through Smashwords, I can buy whatever ereader I want (one that hasn't even been invented yet) and still read what I've already purchased. How is that not so competitive that Smashwords isn't a much, much bigger player?

Marcel said...

"How is that not so competitive that Smashwords isn't a much, much bigger player?"

No reviews that I can find and no sampling.

David L. Shutter said...

If you haven't seen it yet, Hugh ha an epic post on his blog about winning at Monopoly and rampant anti-Amazon group think, from inside his foxhole at BEA. Great stuff.

http://www.hughhowey.com/winning-at-monopoly/

Jennifer Oberth said...

Marcel - do you mean reviews of the books? There are many reviews. I think it's a numbers game - Smashwords is not as popular as Amazon so there are less readers reviewing there. If Smashwords was as popular, the reviews would probably be the same.

There is great sampling of books on Smashwords and even better for the author/publisher, you can pick how much sampling you want to offer. Again, I find it better as a consumer and an author than Amazon.

So I still don't know why Smashwords isn't giving Amazon a run for its money in regards to book sales/popularity.

Gary Dobbs/Jack Martin said...

It is surprising for Amazon to tell customers to go elsewhere for Hatchette titles. I'm not sure how I feel about that one.

Anonymous said...

Jennifer- as a reader I can say that Smashwords just looks terrible. Their website is so utilitarian that it looks like someone created it in the late 90's and then just never bothered to update it.

Is there a lend feature? I didn't see one. No also-boughts, no reccommendations for other titles based on what I normally buy and rate highly.

Speaking as a writer, ye gods. The formatting issue is a complete nightmare. I can whip something out in Word, upload it to Amazon, and voila, it's selling within hours of hitting publish. On Smashwords? No.

I have to format it. Then it might not be good enough to get it into the Premium Catalog, then you go to upload it? Oh wait you need an ISBN.

Also, Amazon pays monthly whereas Smashwords is only quarterly. So I think it's a two-fold explanation being that fewer authors use Smashwords because it's not as user-friendly as Amazon and not as many readers use it because their interface isn't as user friendly, either.

Jennifer Oberth said...

Anonymous,

I guess it comes down to personal preference. I like the Smashwords website and find it easy to navigate. Having said that, there are definite improvements that can be made, I agree.

I don't need the also-boughts or recommendations (as a reader), but it would be good to have those (from an author perspective).

The formatting can't be compared to Amazon's because you're formatting for multiple platforms. It's worth the extra time up front to then be distributable to many different storefronts. (As I said, I sell more books through Smashwords than Amazon.)

The ISBN is an extra click and free. Not a big deal.

It would be nice if Smashwords paid monthly, I agree with that, too.

As I said, I suppose it comes down to personal preference. I feel limited in other areas on Amazon. I don't like that I can't control sampling, that's a big one for me. You can't have reviews from authors in your genre on Amazon which, I understand why they did it, but I don't agree with the decision at all.

I guess I'm looking at Smashwords through the rose-colored glasses of 'potential'. If Smashwords suddenly went "viral", those improvements and more would be made, I believe that. I'm hoping, waiting for it. I just like them far better than Amazon.