Tuesday, May 27, 2014

Fisking Charlie Stross: More on Hachette/Amazon

I don't know Charlie Stross, but he's a Hachette author who just commented, wrongly, on the Amazon/Hachette situation. I've already fisked Lilith Saintcrow on this issue, and blogged about the silly things said by James Patterson and Scott Turow.

Barry Eisler calls this "situational stupidity". To quote Barry:

"It’s when an otherwise intelligent person feels so strongly that his emotions obstruct his ability to access his reason, rendering him functionally indistinguishable from a person who is natively stupid."

I agree with Barry, and also believe that's why Lili, Scott, and Jim seem to be arguing via the argumentum ad passiones logical fallacy. That's when people try to use emotion to persuade because they can't using logic.

Lili is a textbook case of author Stockholm Syndrome. To quote her:

"she(my editor) advocates for me tirelessly in editorial and marketing meetings. She fights for my books, she fights to bring my books to you. She is everything an editor should be, and it’s largely because of her faith in me that I can write full-time and pay my mortgage."

She truly believes that her editor's faith and efforts within the publishing house (which should be doing everything it can to promote Lili's books without an editor having to tireless fight for them) are largely the reason she can pay her mortgage. Not her own writing and talent, but her editor.

She appeals to emotion by using loaded words instead of facts. Amazon is a "behemoth" (as opposed to Hachette, which David Gaughran just pointed out is part of Lagardère Group, a giant worldwide media company - magazines, radio, television, online, digital, and books - with annual revenue of approximately $10 billion dollars).

Amazon was "squeezing" Macmillan for more cash (no they weren't, Macmillan was trying to force Amazon to raise ebook prices. In a legal business negotiation each party tries to get the best deal possible and can walk away at any time, there is no squeezing).

Amazon's "blackmailing" her publisher (she meant "extort" but neither definition fits any of Amazon's business practices. They don't have dirt on others they are saying they'll reveal, and they aren't coercing others to do business with them via threats).

Amazon is a "greedy organism" that will "metastasize". Actually, Amazon is a business in a capitalist society--both of which are not just legal but heartily endorsed by our government and our people. Like any company, they seek higher profits and market share. What company doesn't? All companies that try to succeed are cancer? Really?

Patterson appeals to patriotism with the loaded terms "American way" and "American literature." He uses scare words "battle tactic", "war", "pain", "suffering", and "stress" and calls for laws to change things. All without any data, facts, logic, or evidence.

Turow calls Amazon's removing buy buttons "the most daunting exercise of brute market power". Since when are retailers required to sell what Turow wants them to sell? Or price according to how wholesalers want them to price? He says Amazon has "untoward power" (as if the Big 5 don't) and that "It’s a head-scratcher why anyone with regulatory authority would tolerate it." Hint: Because it is legal. The DoJ went after publishers for colluding, not Amazon for being a monopoly or monopsony. Who don't think the Big 5 publishers had lawyers who tried their damnedest to play the monopoly card with Judge Cote?

In the last few days, we've seen emotional appeals devoid of facts and logic, serious situational stupidity, and Stockholm Syndrome.

And now here's Charlie to add to the nonsense with this blog post.

Charlie: Amazon: malignant monopoly, or just plain evil?

Joe sez: When Barry read the tile to the Charlie's post he said to me:

"I would ask him if he really means that. Because if he does, I don’t see how in good conscience he can allow himself to be part of something like that. Isn’t it the same as investing in apartheid South Africa or something similar? If you voluntarily take part in something you know is — something you publicly accuse of being — a “malignant monopoly or just plain evil,” doesn’t that make you malignant or evil yourself? I’m genuinely curious about how Charlie rationalizes his contribution to something he knows is malignant or evil."

Joe sez: I'd guess Charlie is going with hyperbole here. But even if he really feels Amazon is a cancerous corporation who controls prices in order to keep them artificially high, or Satan on earth meant to destroy humanity, Charlie doesn't have a choice on whether his work is available on Amazon or not. 

That's up to his publisher, Hachette.

Though it does beg the question why he's upset that his pre-order buttons were removed and his shipping delayed. If you believe something is malignant or evil, as Barry said, you shouldn't want to take part in it. According to his title, Charlie should be thrilled that Amazon is doing this, because who wants to be associated with a malignancy, or an evil?

Charlie: (I've written before on this blog, notably in 2012, about how to understand Amazon's business strategy. Consider this an update.)

Last week, Amazon.com began removing the pre-order links from titles by the publishing group Hachette. This is a cruel and unpleasant action, from an author's point of view; if you're a new author with a title about to come out, it utterly fucks your first-week sales and probably dooms your career from the outset.

Joe sez: Charlie, I am truly sorry your pre-order links are gone. But to paraphrase what the pseudonymous William Ockham said via Twitter:

"Hachette authors who are complaining about Amazon: remember that advance check you got? You signed away your right to complain about it when you signed a contract w/Hachette and gave up distribution rights. It's wrong to blame Amazon because your publisher fails to get your books into stores."

In the legacy system you are a part of, Charlie, first week sales are indeed important, and poor sales can hurt your career... within the legacy system.

But your career isn't dependent upon Hachette, or any other publisher, and you shouldn't believe it is. I'm guessing your experience, and things industry folks have told you, have convinced you how important first week sales are to them. So you are about to have your first week sales utterly fucked because of what you publisher is doing, and how the industry is set up to weigh first week sales heavily. 
And you still think Amazon is the one being cruel and unpleasant? They didn't force you to sign an unconscionable, one-sided contract with a publisher who doesn't care about its authors. 

Charlie: And if you're someone like me, with a title about to come out, it frustrates and irritates your readers and also damages your sales profile and screws your print run (because if Amazon don't order your books in advance in dead-tree form they don't get printed, and if they aren't printed and in the warehouse they can't be sold elsewhere). Make no mistake: Hachette may be hurting, but the people who take the brunt of this strategy are the authors.

Joe sez: Hachette can end this whenever they like. But they are apparently holding out, while simultaneously refusing to explain what the terms of the negotiations are to their authors. Which means your print run will suffer because your publisher cares more about controlling pricing than it does your new release.

Charlie: (Disclaimer: I am published by Orbit, a Hachette imprint, in the UK. Amazon is not currently removing the pre-order option from titles sold through amazon.co.uk. My Orbit books in the UK are published by Ace, part of Penguin group, in the USA. And I've got another series published (on both sides of the pond) by Tor. However, Amazon have played this nasty trick on Tor, Ace, and Hachette at different times: I've been caught up in it more than twice, and if they extend this strategy to amazon.co.uk again, my UK readers are going to be unable to buy "The Rhesus Chart" from Amazon.)

Joe sez: You call it a nasty trick.

Did you follow the agency model DoJ suit? The real nasty trick was perpetrated by big publishers, who colluded to control ebook pricing. That's illegal. That's why they lost. (Tor and Ace are part of Macmillan, who tried to force Amazon to accept higher ebook prices.)

What makes you think Amazon is throwing its weight around, when there is no evidence of that? The precedent shows publishers trying to throw their weight around. The agency model, windowing, high ebook prices--big publishing is guilty of all of this. And more.

Charlie: Forbes mostly calls it right, at least at the corporate level, and until the end of this paragraph, where their 'free-market' knee-jerk kicks in and they bottle it:

Joe sez: Free market is a knee-jerk? You do know the definition of a free market is one free of price-fixing, and Hachette was guilty of collusion in order to price-fix?

People have a choice on where to buy books. Amazon being the biggest bookseller on the planet doesn't make them a monopoly or monopsony. If readers demand Hachette books, Amazon has not prevented them from being sold. There are thousands of other retailers who sell Hachette titles.

I have five books published through Amazon's Thomas & Mercer imprint, and more than a dozen self-pubbed through Createspace. Guess what? Indie bookstores and B&N don't stock my paper books. And they are allowed to make that choice. And I don't publicly whine about it.

This is the part of the Forbes article Charlie quoted:

Forbes: What we're really seeing is a battle between the people who make the product and the people who distribute it as to who should be getting the economic surplus that the consumer is willing to hand over. Like all such fights it's both brutal and petty. Amazon is apparently delaying shipment of Hachette produced books, insisting that some upcoming ones won't be available and so on. Hachette is complaining very loudly about what Amazon is doing, entirely naturally. The bigger question is what should we do, if anything, about it? To which the answer is almost certainly let them fight it out and see who wins.

Joe: My take is different. I agree with William Ockham. So here's William...

William: If you want to understand what a party is doing in a negotiation, a good place to start is with their public statements. In this case, we know exactly what Hachette was planning to do in this negotiation because they published their strategy. In a letter to the federal court in the ebook antitrust case, believe it or not. When the proposed final judgment for Apple was announced, it included a provision that prohibited Apple from entering into agreements that would limit its ability to offer retail discounts. The Big 5 legacy publishers got together an wrote a whiny letter to the court objecting that this violated the terms of their settlement (the court rejected this argument because, well, it was stupid). Here's what the Big 5 said:

"Each Settling Defendant entered into a carefully negotiated consent decree with Plaintiffs. For the original three Settling Defendants, the negotiations with Plaintiffs lasted nearly one year. Although the DOJ initially sought to include a five-year prohibition against the agency model—identical to Section Ill.C in the Proposed Order—the final consent decrees permit the use of the agency model while also expressly allowing for retailer discounting for a period of two years. Once that "cooling off' period has run, each Settling Defendant may negotiate unilaterally with e-book retailers to enter into any distribution arrangement, including an agency model."

Let me translate that from legalese to English. The Big 5 are saying that as soon as the two year "cooling off" period is over, they want to get rid of retail discounting. Literally their only objection to the Apple settlement is that it will leave one ebook retailer who must maintain the ability to discount. The Big 5 have been waiting for two years for a chance to get rid of retail discounting. And take special note of that word "unilaterally". That means that the Big 5 each have to negotiate independently with their retailers. Those "original three Settling Defendants" are reaching the end of their "cooling off" period in September. They are negotiating new contracts with retailers right now. Unilaterally. Which means only one of them (at a time) can try to impose their preferred "no discounting" policy on retailers. One of them has to go first.

I have a clue as to which of one of the three is doing it. The only time a single one of the Big 5 tried to negotiate a no-discounting agency agreement with Amazon, Amazon removed the "buy" buttons from their books (that was MacMillan in January 2010). So, I think it is pretty safe to assume that Hachette is the one trying it now.

But maybe that's not enough evidence for you. Let me suggest that you find a few Hachette ebooks which are not available for pre-order on Amazon and then go over and look at the prices on Barnes & Noble's web site. Carefully note the paper list price and the ebook price. When I did this, every single title I checked fell within the non-discountable price bands in Apple's illegal proposal from January 2010. And if you check the ebook prices for the same books in the iBookstore, you will discover that Apple is offering most of them for less. Because Apple needs to keep its nose clean during its appeal. Hachette has pretty clearly already got B&N to sign on to the non-discountable agency prices (because B&N would love not to have to compete on price with Amazon).

I really don't understand why this is such a big mystery to people. Hachette is doing what they said they were going to do. Amazon is reacting exactly the way we would expect them to.

Joe sez: Really? You don't understand why people aren't getting it?

William: Ok, I do understand it. Nobody is paying attention to what is really going on. It's just too inconvenient to spend your time reading a bunch of boring court documents. Unless, you know, your livelihood depends on it. Or like me, you just like that sort of thing.

Now, I ask you this. Do you think Amazon is going to give in? I don't. A long time ago, I read a book that had a very important concept about negotiation. It's called your BATNA. That stands for Best Alternative To A Negotiated Agreement. You always need to know yours and it really helps if you know the other party's. I think Amazon has the best BATNA. They just stop carrying Hachette books. Amazon buyers will still be able to get them through third-party sellers on Amazon's site. Hachette's BATNA is what, exactly? So, I predict that Hachette will blink. And then we will get to see if any of the other Big 5 publishers want to make a go of it.

Joe sez: William said on Twitter, "Those prices are hoofbeats and I am assuming it's a horse. Show me some stripes and I will believe it is a zebra."

I'm good with accepting William's take until more information presents itself. After all, we have a history of one of these companies illegally conspiring to raise prices, and one who wants to keep prices on everything low.

And let me repeat something for those who still don't seem to get it: The Agency Model Sucks. Customers pay more, and authors and publishers earn less.

It's not that the agency model itself is bad, or illegal. But publishers are using it to keep ebook prices high to protect paper sales. (You should follow and read all the links in this post, but if you only read one, follow that one.)

Charlie: Planet earth calling: Hachette is the publishing arm of a gigantic multinational group, Lagardère, which boasts an annual turnover of €7.37Bn. However, as Lagardère's components include a hefty chunk of EADS (part-owners of Airbus) plus TV channels, duty-free shops, newsagents, sports clubs, and magazine publishing it shouldn't be much of a surprise to discover that Hachette turned over €2.1Bn in 2012. That same year, Amazon's sales topped $61Bn (or around €45-50Bn).

So, point one is that this is not a battle of equals: it's a big-ish corporation being picked on by a Goliath more than ten times its size, in an attempt to extort better terms.

William: Comparing a retailer and a multi-national conglomerate is silly.

Joe sez: And there is a big difference between sales and profits. But no matter how you slice it, Hachette isn't a helpless neophyte. They have power and capital and lawyers and have been around for almost 200 years. Amazon has the power advantage here, because they have customers Hachette wants access to. If Hachette wants to reach those customers, it will either accept Amazon's terms or withdraw its catalog. And if Amazon can't stand the idea of losing Hachette's sales, it will back down.

That's business, folks. It's capitalism. It's negotiation. And it's legal. 

It's pretty damn simple.

Charlie: But it's not that simple, either.

Forbes seem to think that Hachette is a producer and Amazon is a distributor. This isn't quite true. I am a producer. From my perspective, Hachette is a value-added wholesale distributor: they supply editorial, production, packaging, marketing, accounting, and sales services and pay me a percentage of the revenue.

Joe sez: No, Charlie. You can hire and fire a value-added distributor.

Hachette owns your ass.

Whether or not they add value is subjective. If you think it is okay Hachette makes 3x the ebook royalties you do because they do some editing, accounting, etc. that's your call. But when you sign away your rights forever you are at their mercy.

In contrast, my agent does all of that for me for several of my self-pub ventures, takes only 10%, and I keep my rights.

Charlie: (I could do this myself, and self-publish, but I don't want to be a publisher, I want to be a writer: we have this thing called "the division of labour", and it suits me quite well to out-source that side of the job to specialists at Hachette, or Penguin, or Macmillan.)

Joe sez: I hire much of these jobs out and get to keep my IP and have total control over it. I too want to be a writer: we have this thing called "common sense", and it suits me quite well to out-source that side of the job while still controlling my rights, making the lion's share of the profit, and never being at the mercy of specialists like Hachette.

Charlie: Amazon is not a value-added wholesale distributor: it is a retail distributor. They have a publishing subsidiary and allow me—if I want to self-publish—to use them as a sales channel, and will even pay quite well if I accept extremely onerous terms.

Joe sez: Onerous terms? Like 70% royalties and you get to keep your rights? Like letting you control cover art and price? Like letting you make your book free and put it on sale? Like getting your books into 12 countries?

Charlie: But they don't do much else for me and in particular if I were to self-publish through Amazon I would be vulnerable to exactly the same pressure that Hachette is currently on the receiving end of, but with less recourse.

Joe sez: I call this the "wolf argument". To wit: don't worry about being attacked by wolves when a lion is currently gnawing your legs off.

I've seen Amazon do some things I haven't agreed with, and vocally opposed. They removed reviews. They made it much harder for erotica authors to earn money (so did B&N and PayPal). They cut ACX royalties. I haven't liked some of their recent contract clauses.

But they've been overwhelmingly good to authors. Both KDP and A-Pub offer better royalties than anyone else in publishing. They continue to innovate, offer expanded services, and grow into new territories. They pay monthly, their accounting is transparent, and they are smart and easy to work with.

Someday Amazon may start throwing its weight around and squeeze authors. And someday a meteor may hit the earth and annihilate all life.

I'm not going to live my life, or base my career, on what a meteor, or Amazon, might do.

Charlie: Amazon's strategy (as I noted in 2012) is to squat on the distribution channel, artificially subsidize the price of ebooks ("dumping" or predatory pricing) to get consumers hooked, rely on DRM on the walled garden of the Kindle store to lock consumers onto their platform, and then to use their monopsony buying power to grab the publishers' share of the profits.

Joe sez: So much wrong here.

First, Amazon invented the distribution channel. They aren't squatting on some natural resource. They created the proprietary format. And proprietary formats have been part of technology as long as there has been technology (remember the Tesla/Edison AC/DC battle?), and are legal.

Second, show me a predatory pricing campaign that was successfully litigated. This canard gets trotted out a lot, but "predatory pricing" in this case means "lower prices for consumers" who tend to like that, as does the DoJ. Most retailers use sales as loss leaders. The DoJ isn't trying to protect competitive businesses from the workings of the market (including smart, aggressive competitors who innovate and have superior skills, like Amazon.) The DoJ's goal is to protect consumers from the failure of the market (such as when publishers collude to fix prices).

Why don't you think a $28 hardcover is predatory? Why can you get a season of TV on DVD for $10 (24 hours of entertainment), but hardcovers (8 hours of entertainment) are so ridiculously marked up they qualify as luxury items? A book costs about $2 to print. Why the inflated price? And if publishers really competed with each other, why are books by every publisher similarly priced? And why does every publisher have a practically identical boilerplate contract with practically identical terms?

Third, Amazon doesn't require DRM. Your shithead publisher does.

Fourth, they aren't a monopsony. They just happen to have the most market share, which they got by keeping prices low and offering good selection and customer service. Your publisher makes a higher profit on every one of your books than Amazon does. Especially ebooks.

Your share of the profits is being eaten by Hachette, not Amazon. But by all means, keep defending them while demonizing the retail outlet that probably accounts for the majority of your sales. (If it doesn't yet, it will. Check out the latest Author Earnings report. You should look at it anyway, because it compares how many self-pubbed authors and legacy authors make a living wage. Answer: more self-pubbed authors.)

Charlie: If you're a consumer, in the short term this is good news: it means you get cheap books. But if you're a reader, you probably like to read new books. By driving down the unit revenue, Amazon makes it really hard for publishers—who are a proxy for authors—to turn a profit.

Joe sez: Via Wikipedia, Stockholm Syndrome is a psychological phenomenon in which hostages express empathy and sympathy and have positive feelings toward their captors, sometimes to the point of defending and identifying with them. These feelings are generally considered irrational in light of the danger or risk endured by the victims, who essentially mistake a lack of abuse from their captors for an act of kindness.

Charlie, publishers have been earning record profits these past few years. Publishers aren't a proxy for authors. Publishers are property owners. They do whatever the hell they want to with the property they own, your best interests be damned.

Stop defending the company giving you lousy contract terms, keeping you in the dark about this situation, and who, in your own words, is dooming your career.

Charlie: Eventually they go out of business, leaving just Amazon as a monopoly distribution channel retailing the output of an atomized cloud of highly vulnerable self-employed piece-workers like myself. At which point the screws can be tightened indefinitely. And after a while, there will be no more Charlie Stross novels because I will be unable to earn a living and will have to go find a paying job.

Joe sez: You didn't take that far enough. Amazon's ultimate goal is to create a machine that runs on the screams of babies, and use it to fly the earth directly into the sun, the entire time kicking you in the balls over and over while calling you mean names.

You're right about something. The screws are being tightened on you. But it isn't Amazon doing it.

Charlie: TL:DR; Amazon's strategy against Hachette is that of a bullying combine the size of WalMart leaning on a much smaller supplier. And the smaller supplier in turn relies on really small suppliers like me. It's anti-author, and in the long term it will deprive you of the books you want to read.

Joe sez: Again, only Hachette and Amazon know what the negotiation details are, but William makes a damn good argument that it is Hachette trying to force the terms, and a pretty good guess those terms involve agency pricing.

Hachette does rely on you, and other authors, but you don't have to rely on them. Authors can reach readers without Hachette. If Hachette disappears tomorrow, readers will still be able to get books. Even your books... unless they become part of the assets in the bankruptcy case.

Charlie: Final note: some time in the 1980s the US Department of Justice's anti-trust lawyers changed their focus from preventing monopolies from forming to preventing companies from colluding to preserve their margins ("price fixing cartels"). As a result, Amazon very nearly gained a monopoly of ebook sales; they're still around the 85-90% mark in the UK, and peaked at over 80% in the USA. (The irony of the DoJ-Apple iBook store settlement is that the DoJ went after the market incomer with the higher prices and 10% market share, rather than the near-monopolist who was using predatory pricing to drive their competition out of business.) It's hard to argue against low prices, but consider this: texts are a cultural medium, and the production of new texts is not something amenable to automation or mass production. I can't go out and hire twenty people off the street and install them in a cubicle farm extruding Charlie Stross branded fiction product. (I can't even hire twenty SF novelists and train them to do that. Our product is bespoke and highly idiosyncratic.) It used to be the case that cultural activities like writing fiction benefited from some barriers against marketization, but a corollary of the global free trade regime we live in these days is that no field is exempt. The net book agreement was declared illegal decades ago: my product has to compete for your attention and money in the same market as the X Men movie franchise and Assassin's Creed games. Neither of which have a near-monopoly incumbent like Amazon squatting between them and their customer base, trying relentlessly to depress prices and force them out of business.

William: I'm not a lawyer (and neither is Charlie Stross), but I've read the Sherman Anttrust Act. Preventing monopolies is not a goal of the law. Preventing monopolies from engaging in anti-competitive behavior is. But preventing price-fixing cartels is an explicit part of the law. There is absolutely no doubt that Apple and the Big 5 engaged in a price-fixing cartel. They were almost laughably obvious about it. Amazon gained their market position by out-competing other ebook retailers. There is no evidence that Amazon has engaged in any anti-competitive behavior. Stross and his ilk throw around the term "predatory pricing" without any indication that they understand what it means in American law. Here's a hint. There's this thing called Wikipedia. At the very least, demonstrate that you have read the Wikipedia article on a topic before you pontificate about said topic. Otherwise, people might confuse you for a bloviating blowhard. And we wouldn't want that.

Stross also trots out the "publishing is a special snowflake" argument. This is just hogwash. First, he is just wrong about the facts. He apparently has never heard of ghost-writing or James Patterson (Stross describes Patterson's business model pretty well). Stross's books (or Konrath's for that matter) are nothing special unless they connect with readers. Amazon isn't standing in anyone's way. Writers, movie makers, and game programmers all have access to the internet to sell their wares. There is no one squatting between you and your customer base. I buy my books from Amazon because they offer me a better customer experience than any other retailer. 

Let me give you a non-book example. Last week, I was looking to buy a new laptop for a project I'm starting. I'm a software developer, so I want to buy a lightweight powerful machine with Intel's latest processor, plenty of memory, and an SSD drive. I found a model on Amazon that met my needs, but it was not yet available from Amazon or any third-party sellers. There was an ad at the bottom of the page for that exact model from the Microsoft store and they had it in stock. I discovered that Microsoft had an exclusive on this laptop for now. Amazon's willing to lose a $2,500 sale by selling ads to their competition if that is what it takes to solve the customer's problem. 

Have you ever seen an ad like that for a book from a Big 5 publisher on Amazon's site? How many Hachette authors have inquired about placing ads for their books like that? What is Hachette doing to help readers find Hachette books right now. As best I can tell, absolutely nothing.

Joe sez: I actually do understand Charlie's frustration. When you have no control, and forces around you are hurting your career, it is natural to want to get angry and point fingers. When the elephants fight, it's the grass that suffers.

So stop being the grass.

It's understandable why Patterson and Turow are plaintively arguing for the legacy industry. They are the lucky ones whom publishing has blessed. They want the status quo to go on forever, and why wouldn't they? They're rich and successful and have done well in the old system.

But the majority of their fellow authors have not. The majority of authors need a day job, or a spouse that works. That's difficult enough, but legacy authors are also at the mercy of publishers who offer them one-sided contracts and pay them twice a year for sales that happened 18 months earlier. They have been taught and repeatedly told that the legacy industry is all there is, and they can't do better on their own. Some, like Lili and Charlie have bought into it so whole-heartedly that they defend their publisher's icky behavior, and condemn a company--Amazon--who could liberate them.

Author Earnings pretty much confirms that authors can do better on their own. Authors like me have been saying this--with data--since 2009. For five full years I've been screaming this shit. And yet there are still authors who cling to their publishers like life vests in a turbulent sea.

Your publisher isn't a life vest. It is a concrete block tied to your ankles.

Situational stupidity? Stockholm Syndrome? Self-delusion? Habit? Fear? Why do authors not only stay with publishers, but publicly endorse them in ridiculous blog posts?

I don't get it. And I don't care.

This blog isn't for Charlie or Lili, or Jim or Scott. They've already chosen sides. They won't listen to me.

This blog is for those who haven't made up their minds yet. Those who seek information. Those who follow Twitter or read the New York Times or pro-Hachette author blogs and hear bad things about Amazon and wonder if they're true.

I can't tell you if they're true. Only Amazon and Hachette know what's going on.

But I can hear hoofbeats. And I'm betting it's a horse.

If you think otherwise, post your argument in the comments.


Anonymous said...

Barry calls it, "situational stupidity," which it is, a rather regressive form of cognitive dissonance. It's akin to those zombie memes you guys blog about, memes which won't die no matter how many logic bullets they take to their heads.

Anonymous said...

"Lilith is a textbook case of Stockholm Syndrome. To quote her:

'sh(my dtr) dvcts fr m trlssly n dtrl nd mrktng mtngs. Sh fghts fr my bks sh fghts t brng my bks t y. Sh s vrythng n dtr shld b nd t’s lrgly bcs f hr fth n m tht cn wrt fll-tm nd py my mrtgg.'"

Ed said...


I'm doing my best to learn from you and I have been enjoying the fisking articles of late.

I was hoping you could lend a hand at fisking Smashwords latest blog post...


From what I read, they're saying that Amazon's eventual target will be indie authors themselves. I am by nature a worrier and this kind of post, by its very tone, is meant to instill fear. I know Smashwords has their own stake in the Agency Model, but honestly, I'm having trouble parsing their post into the fabric of what you're saying.

In these matters I am too inexperienced to not worry that somehow this will affect all authors at some point (indie and traditional).

Any help would be most appreciated.


Terrence OBrien said...

Situational stupidity? Stockholm Syndrome? Self-delusion? Habit? Fear? Why do authors not only stay with publishers, but publicly endorse them in ridiculous blog posts?

I'm beginning to suspect they are looking for a personal connection. Amazon considers me an ASIN, and I am delighted with our relationship.

Joe Konrath said...

Ed, I like Mark Coker and he says some smart things in his piece, but I don't agree with his conclusions,

I'd be happy if KDP switched to wholesale model. If it happened, I'd guess Amazon would discount my books, yet still pay me on the wholesale price I set. That's what they currently do with many of their wholesalers.

If Amazon were to cut KDP royalites, I'd expect indie authors to raise prices to make up for the difference. Amazon has a history of wanting lower prices. So they'd either discount and take the smaller profit, or go back to the old model.

Bottom line: don't worry.

Scott Allen Fallbeck said...

An enjoyable read, Joe. One question that keeps coming to mind as I read your posts: "Why is it so hard for writers to treat themselves as business people?" Yes, writing itself can be an art, but at the end of the day a writer, like a business person, is selling a product. Smart business people put their fate in their own hands. Perhaps writers should too...

Keep up the good work!

JKBrown said...

Thank you so much for this post, Joe! I'd have to say this sums things up so well that I will NEVER consider the Big 5 again until their business models change.

William: A long time ago, I read a book that had a very important concept about negotiation. It's called your BATNA. That stands for Best Alternative To A Negotiated Agreement. You always need to know yours and it really helps if you know the other party's... ...Hachette's BATNA is what, exactly?

I thought that was painfully obvious: resort to a media campaign to drive customers away from Amazon, and cause a protest from their authorship who have a direct stake in the matter. To a small degree, it's working, but not nearly enough.

It also seems that Hachette is not only most likely to blink, but already has, because they're falling back to their BATNA! Amazon is still selling current Hachette books. If I were Amazon and this continued, I'd use my BATNA and cut all ties completely.

Let me give you a non-book example. Last week, I was looking to buy a new laptop for a project I'm starting. I'm a software developer, so I want to buy a lightweight powerful machine with Intel's latest processor, plenty of memory, and an SSD drive. I found a model on Amazon that met my needs, but it was not yet available from Amazon or any third-party sellers. There was an ad at the bottom of the page for that exact model from the Microsoft store and they had it in stock. I discovered that Microsoft had an exclusive on this laptop for now. Amazon's willing to lose a $2,500 sale by selling ads to their competition if that is what it takes to solve the customer's problem.

That's more of how ads work than Amazon's fault. I was looking to pay for a website versus a free blog for many reasons. As soon as I showed interest, all my ad content turned into website providers. I picked one of them, and now suddenly I don't see them advertised anymore (though the others still are).

As to your point about what the publisher does, I don't get it either. I'm a "pay-up-front" guy who's forking over 2000 dollars for my first book (good art, editor, proofreader, formatter, website). I can make that up with approx. 1000 ebooks (70% of 3.99 after taxes). How many books does Charlie have to sell to make 2000 dollars? Probably just as many (if not more) and his prices are far-higher than mine.

It seems so unconscionable.

Mightyflub said...

I like Charlie. He writes good books, engages well with the fans, cares about his craft. The problem is he has a serious blind spot when it comes to Amazon and his publishers.

I think it comes from him doubting his ability (And the time it will take) to go down the self pub route. Although credit to Charlie he does say he's made preparations in case he ever need to do that. Misguided but not stupid. Personally I think Charlie is in an excellent position to take advantage of self pubbing. He's got an eager and engaged fanbase that will buy anything he puts out and he writes in sci-fi subgenres that most people don't. Plus he writes more books a year than his publishers will release. I think despite the work it would take to get going he'd do really, really well on his own. Let's face it I don't think he gets much publicity money spent on him at all (Unless someone can show me what I've missed) and everything else he doesn't want to do he can hire someone to do much cheaper than he currently pays his publisher *and* he still owns his own work.

I think part of the issue is his publishers are a known quantity and it's obvious from his posts that he's worried about what Amazon might do in the future.

Alan Spade said...

" If it happened, I'd guess Amazon would discount my books, yet still pay me on the wholesale price I set."

They already do it indirectly with your Createspace books, Joe. Look, for instance at your paperback book The list: http://www.amazon.com/gp/offer-listing/145288126X/ref=tmm_pap_new_olp_sr?ie=UTF8&condition=new&sr=&qid=

The paperback price is $12.56, but there's an Amazon marketplace seller, pbshopus, which sells it as a new paperback (new tab) for $10.43 (a 25% discount). By the way, with the delivery price, it's $3.99 more, so no gain for the reader here.

The problem is, to my knowledge, when you make a sale through a third-party seller of a new book, that sale doesn't improve your Amazon's ranking for the paperback. So, you are suddenly losing control over the sale of a new paperback book.

Why are third-party sellers allowed to sell new books of The List on Amazon? I believe it's because you use the expanded distribution program: you allow third-party sellers to sell your book, with a discount, even at Amazon's website (and elsewhere).

Yeah, I'm a suspicious guy, but I think we are losing control, there. You don't know if Amazon is not sock-pupetting some third-party seller to make sales behind your back.

I like to work with Amazon, but I also like to have control. If it were Amazon which was discounting my book, no problem, I'm very happy with that! But it's a third-party seller. A big difference.

Sorry to digress from the main subject, and I know Createspace are just a trifle from your overall sales, Joe, but there are still authors who make substantial profit with Createspace, so I thought it was worth mentioning.

antares said...

Mr Stross is a self-described socialist. Every time I have read his opinions on finance or law he demonstrated ignorance. For example, in the quoted piece above, Mr Stross Legardere 'boasts an annual turnover of €7.37Bn.' What does that mean? Is that Legardere's revenue for its last fiscal year? Or its profit?

If I take Mr Stross's words at face value, Legardere turns over €7.37Bn year after year. I'm sorry, but I have the image of Legardere's board of directors and company officers walking into a vault piled high with Euros and turning the piles with pitchforks as one would a compost heap.

Is Legardere's 'turnover' comparable to Amazon's sales? Mr Stross implies it is. Me? I have my doubts.

Stross: [S]ome time in the 1980s the US Department of Justice's anti-trust lawyers changed their focus from preventing monopolies from forming to preventing companies from colluding to preserve their margins ("price fixing cartels").

There is so much wrong with this sentence and the un-history it relates (1984 is ever with us), that I sit here in jaw-dropped stupor. The imbecility of this statement stunned me.

It has never been the focus of the DOJ to prevent monopolies. The focus of the DOJ vis-a-vis the Sherman Antitrust Act is to prevent anticompetitive behavior. Collusion among suppliers to fix prices is anticompetitive behavior. Agency pricing is anticompetitive behavior. Refusal to sell incest erotica is not anticompetitive behavior. Refusal to carry one supplier's products is not anticompetitive behavior.

IMO the DOJ never changed its focus when it comes to enforcing the Sherman Antitrust Act. Sometimes it is more diligent, sometimes less so. But regarding the SAA, I think DOJ's focus has been admirably consistent.

Mr Stross chided Forbes for their opinion 'where their 'free-market' knee-jerk kicks in'. Again, Mr Stross is a socialist. From his writings I gather that he values ideology more than reality. The world is wrong because it does not work the way he wants it to. At least he is consistent. When someone brings up an argument based on principles from capitalism, Mr Stross stops listening and falls to name-calling, such as 'knee-jerk'. I find it hypocritical that Mr Stross condemns one capitalist corporation -- Amazon -- for using all lawful means at its disposal to influence the outcome of negotiations while he lauds another -- Hachette -- even though they have admitted to unlawful collusion to fix prices and harm consumers thereby.

One thing I am sure of: Charlie damn well knows who butters his bread.

Oh, BTW, this nonsense about, yeah, Hatchette is a big corporation but Amazon is a bigger corporation so Amazon is playing the bully against the little guy. When Frazier fought Ali in '71, Frazier stood 5'11 1/2" (182cm) and Ali stood 6'3" (191cm). Ali outweighed Frazier by 10 pounds (about four and a half kilos). Did Ali bully Frazier? No. Frazier won.

In my experience, there is a point at which a player enters the big leagues in terms of negotiations and litigation. Bigger players have no advantage. The Yankees have the biggest payroll in the majors and have had for more than a decade. So who won the World Series last year?

This is not a poker hand in which Amazon can raise more than Hachette can call. Comparing Hachette's money to Amazon's money is irrelevant.

Hachette has the money to hire the best contract lawyers in the world. So does Amazon. There is a saying in the legal profession: Don't tell me the law; tell me who the opposing lawyer is. In a court fight, this is a contest between two heavyweights, not between a David and a Goliath.

I do not have all the facts, so I will not render my opinion about who has the better argument, Amazon or Hachette. But I respect William Ockham's opinion. He says he smells a stink coming from Hachette's house.


Tracy Sharp - Author of the Leah Ryan Series said...

Joe sez: You didn't take that far enough. Amazon's ultimate goal is to create a machine that runs on the screams of babies, and use it to fly the earth directly into the sun, the entire time kicking you in the balls over and over while calling you mean names.

This made me laugh so hard I couldn't breathe. My abs are still sore.

James Scott Bell said...

Great thoughts and rejoinders here, and over at Hugh Howey's site as well. We're all, if not in the dark, in the fog over the details of what's going on, but history and precedent and plain business sense offer some pinpricks of light. It's fascinating from a business angle, and when the sky clears no doubt this all becomes a case study at Wharton and HBS.

It's about money (i.e., profit margins in the future) and control (i.e., the ability to flex and increase said profit margins). So high stakes indeed. Both sides in this are acting the way high stakes negotiators do act.

The BATNA idea is a right-on insight. It's a corollary to the strongest of all negotiating positions: the wilingness to walk away from a deal.

And through it all, indie authors are the corks on this roiling sea.

w.adam mandelbaum said...

A machine that runs on the screams of babies? Amazon is family court?

William Ockham said...

JKBrown: My point about the laptop ad is that Amazon sells ad space to their competitors on what is the most valuable screen real estate in the entire world. They are willing to compete with third party sellers and other retailers because they make a little bit of money however I buy and they give me the best chance of solving my problem. So I go there first.

Chris Hollis said...

It’s so easy to blame big businesses because we don’t get how they operate. I always used to say nothing was black and white. There are shades of grey.

(E.L. James wrecked that particular catchphrase for me)

I’ll bet good money the legacy industry is jam-packed with hard working, well-meaning individuals who genuinely have a passion for books. Otherwise the whole system would have collapsed long ago, right? Surely legacy publishers love authors and readers alike because they have nothing without both of them? It’s not Doctor Doom sitting in the office on the top floor. Probably.

Likewise, on the supposed flipside of the coin, Amazon is so driven to serve the customer that I’ve never had a bad experience with a purchase. Not ever. And when I query them as an author, I usually have a response within 24 hours. If they manage that with everyone on KDP, that’s serious investment in keeping authors happy.

Doesn’t sound evil to me.

The thing is – given that I freely admit to not knowing the full story either – I personally feel sorry for the legacy industry. And here’s why: I don’t have to pay their wages. As Joe himself would say, no one owes any of us a living. Legacy grew over centuries on the basis of a physical product and everything involved to ship it worldwide. It became a complex set of processes to put polished words into reader’s hands. And it had a very good (print) run.

Amazon have undermined all that with an intelligent use of technology, an idea it got from iTunes. Thanks to Amazon, the legacy industry appears to be shrinking. It’s certainly changing. And no consumer is going to be upset about it because they still have polished words in their hands.

Yes, polished, because we authors work hard at what we do, self-published or legacy.

All a reader wants (and I’m a reader too) is to have their favourite authors accessible to them and get a good deal for novels, novellas, short stories, poetry, etc…

That part hasn’t changed since Shakespeare (ish). So the real question I think people like Stross and Saintcrow should be asking is exactly the same as Konrath asks, and Hollis (that’s me). It’s “What can I do to help reach and extend my readership?”

The answer is perhaps different for everyone. Stay in legacy, keep trying to get a legacy deal, self-pub. Do what you like, but don’t blame the big unknown corporation who has the reader’s interests at heart. Don’t flame the people who take the other side and delete their vowels. Don’t call people assholes in tweets because they made valid points.

Joe can use some tough language sometimes, it’s true, but he invites debate and makes valid points. At least someone’s doing that.

Anonymous said...

"A book costs about $2 to print. Why the inflated price?"

Because they "need" to subsidize their high paid execs and NYC flats. Same allegations the music industry made in the last decade, with the same errors - and, sadly, with the same wrong-headed defense by the "Metallicas" of the publishing industry.

Anonymous said...

Another great post. Quick question: 'monosopy'...or did you mean 'monopsony'?

Selena Kitt said...

When elephants fight, it's the grass that loses. It's true. But the problem is, it may be legacy publishers who are the grass underfoot now, but it will be the self publishers in the future. I know I'm the grass, have known it for years. And on several occasions, at least once a year, Amazon has been the lawn mower. They've continued to trim my profits and make it harder and harder to sell my books. You know that's true, Joe. And as Amazon's market share grows, so does the power grab. That's all well and good and part of the free market - I can't make Amazon do anything. I'm not in control. I'm the grass and unless I become my own Amazon (I'm working on it :) I'll always be the grass. Self publishers have MORE control over their books than legacy authors do. But they'll still always be grass in this fight under the feet of elephants.

Burton said...

I get the feeling Hachette editors emailed their authors and told them to blog about this. Otherwise it's amazing to me that these authors are crying over their "pre-order" buttons. The vast majority of indie authors have been doing just fine (hell, some even better) without that pre-order button. But here you have all these trad pub authors wah-wah-wahing over the pre-order button. You'd think they could get by without it, but apparently THEIR ENTIRE LIVELIHOOD DEPENDS ON THE PRE-ORDER BUTTON!!!!! (Or so it seems.)

Good grief. I'm not sure if these authors are just flat-out lazy, or if they've been coddled and "handled" for so long that they don't think they can get dress by themselves in the morning without their editors there to lend a hand.

Jude Hardin said...
This comment has been removed by the author.
Mirtika said...

Hang on, if Mr. Stross is a socialist, shouldn't he refuse to contract with a capitalist behemoth like Hachette and its parent company? Shouldn't he, for ideological reasons, start his own free or indie press and sell his books according to need/ability to pay (free for some, less price for some, more to others who can afford to pay, you know, sliding scale according to need and ability to pay?)

I think the fact that in an era when any author with a following can easily be his own boss and place his own price on his work, sell it from his own web site if he wanted and skip all the behemoth capitalists...but that he continues to be in a capitalist relationship with Hachette means he's a hypocrite socialist.

I guess if his contract were with Amazon, he'd be backing their behemoth capitalist ass.

And yes, he's a good author. Dude writes cool SF. But he really is coming across as brainwashed in that post.

Alan Tucker said...

I keep seeing the "wait until Amazon lowers royalty rates for self pubs!" argument tossed out in articles and comments.

Yes. ACX lowered its rates recently and yes, it sucks. There are also more costs involved in the production and delivery of audio books than ebooks. ACX gave my narrator a stipend to do the first book in my fantasy series that will probably take them about 50 years to recoup at the rate sales are going. And my narrator isn't the only one who got paid for pie in the sky. ACX wanted to build its catalog. It was a business decision, good or bad, time will tell.

Ebooks are a different beast. Amazon has very little costs in accepting, "stocking", and distributing these. There's no business reason to cut the royalty rates. If authors wish to cry, "Wolf!" they should think about the possibility that KDP Select may someday become the only option for publishing on Amazon. To me, that seems a much more likely route for them to take in the future. Then, you'd have to ask yourself some hard questions.

But would any of that really be worse than signing a legacy deal?

Talin said...

@Selena Kitt - I think a lot of erotica authors would love it if more channels opened, especially for edgier works. Though there seem to be risks though of lawsuits in some places.

SM Barrett said...

Maybe I'm late to the game here, but I just want to clarify something. This is price negotiation after Amazon won the lawsuit against big publishing for price collusion. Amazon is in talks with the first in line, which just happens to be Hachette. The issue is pricing for distribution...
Are the big legacy publishers trying to keep ebooks priced at a ridiculous rate just to protect paper sales?

Is that what this all really boils down to, trying to keep hardcovers and paperbacks more attractive than digital?
Isn't that like trying to price DVDs out of existence so you can keep cassettes and video tapes?

Is this why we keep reading this ridiculous nonsense about how Amazon is 'ruining literature', by providing ebooks which don't have that god damned romantic smell?
Hachette and all the others colluded to keep ebook prices unreasonably high to protect paper in a world where digital reading is growing by leaps and bounds? Seriously?

Why in the hell would anyone ever shackle themselves to such an incompetent middleman? Even if we ignore the immoral royalty rates, the loss of rights and the lack of support and promotion, this alone should make any wordsmith back away slowly.
If you wanted to design automobiles, you wouldn't give your designs to a horse breeder. You wouldn't take a job at a stable and you wouldn't care what saddle makers thought.

Joe Konrath said...

Are the big legacy publishers trying to keep ebooks priced at a ridiculous rate just to protect paper sales?

Yes. That's been their goal for over five years, and they'd admitted it.

Why in the hell would anyone ever shackle themselves to such an incompetent middleman?

Hence my blog. I keep ranting and railing, and some authors just don't get it.

C'est la vie.

Shantnu Tiwari said...

" Amazon's ultimate goal is to create a machine that runs on the screams of babies, and use it to fly the earth directly into the sun, the entire time kicking you in the balls over and over while calling you mean names."

You sir, win the Internet for this comment alone. I am going to frame it and put it over my bed.

@Antares, some really good points, and well articulated.

@Selena Kitt: And you have references to back up that claim?

T. M. Bilderback said...

As an independent author, I've said before in my own blog that self-publishing is the way to go. Not only do I control when my stories come out, I control everything about my stories: Cover art, length, content...you name it, it's mine. After all, I wrote the darn thing...shouldn't it be MY responsibility to take care of it?

Also, the 70% royalties are good, too. I can't match Joe Konrath's sales yet, but I certainly can't complain about the royalties.

Until the big 5 realize that without authors, they have nothing, legacy authors will continue to be taken advantage of in the worst possible way.

Joe Konrath said...

I can understnd why Turow and Patterson never comment, but if I were Stross of Saintcrow I'd either defend my position here or do a rebuttal blog.

Don't they have any pride? Don't the believe what they wrote?

I raised points they need to consider. Wouldn't that make a person want to debate?

David L. Shutter said...

What a week for blogging! And just when I thought the best Pub Fisking Days we're behind us, now that Turow had left the AG Prez spot, we get treated to a bounty of these monumental gems of logical fail.

Love the grounded, rational and "common sense" approach behind many of the responses, whether from Gaughran, Ockham or Howey. While we don't know for sure, something is definitely starting to stink over at Hatchette.

But PG had perhaps my favorite commentary of the week today. Essentially, forget about the latest Amazon business "bully" story. And why not? This story will soon expire and a new one, concerning another Legacy "victim", will surface before you know it. Complete with all the customary spectacle from the usual suspects.

Instead, PG says, if you're a BPH, an otherwise invested Legacy mouthpiece, a Stockholm sufferer or one of many "Publishing Thought Leaders", you should be more worried about the latestAuthor Earnings report, and what it could mean for the future.

Does settling for less than their ideal, best possible pricing terms (post-DOJ case loss) from Amazon hurt Hatchette more than losing legions of future Mid and A-list bestsellers? Ones who abandon them or eschew them from the very start?

I think the latter will prove to be much more damaging.

Anonymous said...

What can indies do to protect themselves against Amazon's possible bad acts against them?

Organize. Join the Writers' Guild of the World.

Oh, it doesn't exist? Then borrow the constitution and by-laws of the WGA, West, and start your own. You could have group healthcare, a credit union, all manner of other useful services, and, most of all, group representation in front of any throne. You could even have an online retailer of your own, in case things really went south at Amazon. Or in case--perish the thought, you legacy addicts--you wanted to compete.

But we're indies, dammit! We're not joining anything!

Membership in the Writers' Guild of the World is strictly voluntary. But like the WGA, it does have certain requirements for membership...such as having an ebook available for purchase. Etc and etc.

Alexander Mori said...

Just read all the fisking posts. So many good points made that I will limit my observations to one thought: Did one of the big writers actually think giving the power to publish to us common people would hinder/hurt/destroy American culture? Reminds me of when my dad caught me listening to Pink Floyd, Rush and Nirvana. He said the country was going to hell in a hand basket (whatever that meant.)

Culturally speaking, we cannot sink lower than: pogs, power rangers, fast and furious movies, real housewives (and spinoffs), TMZ, and the size of portions served at restaurants. Indie writers having access to epublication should be the least of our concerns...

Mightyflub said...
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Mightyflub said...
This comment has been removed by the author.
Ela Lond said...

What all those authors and people who like to shout 'Amazon is evil' are forgetting, is that without Amazon the big publishers wouldn't have such profitable years, and that traditionally-published authors' royalties would be much smaller. If I had love for numbers, I would check the publisher's revenue before ebooks (at the time when Amazon was just a small nobody) and last year. I think that the comparison would turn out to be quite interesting.

I understand Hachette authors' fear and anxiety, especially since the sales of their next books to the publishers depends on pre-orders, but like others had already pointed out, if authors have problems with placement of their books at the retailers, they should turn to their publisher, not attack the retailer. Or do they when they are not pleased with the placement of their books in bookstores or can't find their books in Walmart, write rants about bookstores and Walmart on their blogs and call them evil?

About Amazon vs Hachette, David Gaughran's blog post is presenting some excellent points, something that all Hachette's authors should read.

Dan DeWitt said...

If I thought that someone who went to great lengths to discredit a post of mine was a nutjob, and I knew that I was right, I'd be laying the smackdown on his candy ass. At bare minimum, I'd tell him to his cyberface what I thought of him, and why I wasn't going to debate.

I'm relatively sure that Bill Nye thinks Ken Ham is fifty shades of wacko, and he still debated him.

I know literally nothing about Charlie Stross, but that's a wimp move.

Mightyflub said...

Apologies to Charlie. I was misremembering his post and to my shame I didn't check. What he actually said was.

I ignore Konrath; he's one of the self-publishing lunatic fringe's idols and he routinely makes the key mistake of assuming that because something works for him it must therefore work for everybody else.

(Personally I'd love to see the agency pricing model prevail for trade books. Alas, I suspect Amazon's DoJ won't let it happen ...)

Mightyflub said...

I swear someone called you a nutjob today Joe. I have however spent the day at work reading many blogs so I guess it was one of your other fans that did it ;)

Dan DeWitt said...

"I ignore Konrath; he's one of the self-publishing lunatic fringe's idols and he routinely makes the key mistake of assuming that because something works for him it must therefore work for everybody else."

Not better. The funny part is that Konrath here has made no bones that the odds of achieving his level of success are slim. He's said this in no uncertain terms multiple times. So Charlie's full of it.

As an aside, I have no idea why I feel that you need defending today, Joe, but fuck it, I'm invested.

Selena Kitt said...

@Selena Kitt: And you have references to back up that claim?

Just eight years self-publishing with about 100 titles out there now.

Which specific claim were you referring to?

Joe Konrath said...

I posted a response on Charlie's blog. He moderates his responses, so we'll see if he posts it.

I ignore Konrath; he's one of the self-publishing lunatic fringe's idols and he routinely makes the key mistake of assuming that because something works for him it must therefore work for everybody else.


And I compound that mistake over and over by repeating ad nauseum that everyone's mileage may vary and luck is the key factor to success.

The reason this silly meme keeps getting repeated is because no one actually bothers to read the many many many posts I write where I explain that doing what I do has no guarantees. But it does give writers control over their IP, higher royalties, and according to the latest Author Earnings study, more money.

I fisked you, Charlie, because your post here is wrong on at least a dozen points, and I went into detail explaining why, using facts and logic. Ignoring me is tantamount to holding your hands over your ears going "nyaa nyaa nyaa I'm not listening!" I believe that is a disservice to you, your readers, and the topic we're discussing.

When someone takes me to task on my points, I respond. If you do things differently, that's fine. To each his own. I believe polarizing issues are best addressed with respectful debate. If you'd like to respond, my blog is at your disposal. I'd be happy to post whatever you'd like, in your exact words.

For the record, anyone who idolizes me is silly. I'm just a guy trying to do my best and passing along what I've learned. And I haven't met too many self-pubbed authors whom I'd consider "lunatic fringe". Mostly they're like me and you, just trying to find their way, sharing their experiences.

Right now your experience with Hachette is an unpleasant one. I honestly understand, and I feel for you. I too had unpleasant experiences with Hachette. I bought my way out of the contract and hired a lawyer to get my rights back.

Amazon may be the biggest villain since the dawn of the Internet. But it isn't the villain in this case. You're wrong on this topic, and I'd be happy to discuss it more with you.

Joe Konrath said...

I swear someone called you a nutjob today Joe

I don't doubt it. I get that a lot.

If someone, somewhere, isn't insulting me, I start wondering what I'm doing wrong.

Joe Konrath said...

If I thought that someone who went to great lengths to discredit a post of mine was a nutjob, and I knew that I was right, I'd be laying the smackdown on his candy ass. At bare minimum, I'd tell him to his cyberface what I thought of him, and why I wasn't going to debate.

I agree, Dan.

But the problem is that very few people I fisk ever respond. Steve Zacharius, CEO of Kensington, stuck around for a few back and forths, even though he didn't make a dent in my points. And Barry had a fruitless exchange with agent Robert Gottlieb. And a bestselling author came on anonymously and batted it around with me and Barry for a few rounds. But other than those rare instances, when I excoriate someone's silly argument I hear crickets from them.

Conversely, I've never had anyone attempt to demolish one of my blog posts. People disagree all the time--on twitter, in forums, on facebook, in my comments. But I've never had anyone go point-by-point and fisk me, or even try to.

Are they frightened of my power? (that's a joke--I have no power.) Do they not have the time? (if they have the time to trash me on twitter, why not write a blog post and have a permanent link to trashing me?)

Or maybe it's just tough to argue against someone who is right...

Joe Konrath said...

Hmm. I tried to post on Charlie's blog half an hour ago, and it hasn't shown up yet. He moderates comments, and I've watched as other comments have gone live. But not mine.

Maybe I'm in his spam folder? Maybe he hasn't gotten to it yet? Maybe I messed up posting somehow?

Selena Kitt said...

Or maybe he just doesn't want your comment on his blog? ;) He seems rather insular. So many of these author blog posts have shown up, I'm beginning to be inclined to believe there really IS some sort of push from Hachette. Maybe not directly, but maybe some not-so-subtle suggestions that authors should blog about this. Of course, I tend to like conspiracy theories...

Joe Konrath said...

Looks like he didn't post my comment.

So either there was some tech glitch or oversight, or he's a coward.

Anyone reading this is free to ask him which.

Joe Konrath said...

Assuming he is purposely not allowing my comment, I liken that behavior to Lili's disemvoweling.

Which kind of blog do you folks prefer? One that allows an open exchange of ideas, or one that refuses contrary points of view?

Dan DeWitt said...

I'll just say that blogs that require comment pre-approval tend to be the ones I don't bother posting on. I don't like it when the host has the ability to control the narrative before any counterpoints are even presented. And the disemvoweling thing ... yeesh. I'd sooner shoot myself than do that, but that's just me.

Abusive comments are one thing, and they can be removed. But disagreements should be welcome. Unless someone's a complete wuss.

David L. Shutter said...

"Looks like he didn't post my comment."

Perhaps he also has a blogging policy which excludes "long winded screeds".


Stephen T. Harper said...

"But the problem is that very few people I fisk ever respond.”

Like everybody else here, I’ve been reading these pro-Hatchette handwringing posts and the various eviscerations here, at Passive Voice, Dave Gaughran, Hugh Howey, etc…

I just don’t think any of the original posters were ever interested in logical debate on the merits of their position. They just angry, frightened and blowing off steam.

Too bad they can’t be angry and frightened at the right thing. But that might be TOO maddening and frightening for the time being.

Joe Flynn said...

I dedicated my latest indie published book to the lawyer who helped me to recover the rights to my biggest selling novel — it hit #14 overall in the Amazon paid store earlier this year — and to everyone at Amazon who has made writing novels a paying proposition. More so for me than any of my four traditional publishing contracts. Some people might characterize my dedication as sucking up to Amazon, but I feel it's a matter of simple gratitude.

Joe Konrath said...

I tried commenting on Charlie's blog again, anonymously, and it went through.

I tried to repost what I posted earlier, and it is in moderation again.

It might be some technical thing.

Anonymous said...

Joe, before I became a self-published author, I was a reader of Charles Stross's books. I read his blog religiously and enjoyed his posts. He's smart.

However, I am at a loss about his response to the Hachette - Amazon dispute. I thought he was a better thinker than that. I'm saddened to find out otherwise. I think it really is Stockholm Syndrome and situational stupidity. He's dependent on Hachette for his livelihood due to his contract with them and thus, he's at the mercy of whether Hachette decides to push things with Amazon over -- I suspect -- the reinstitution of the agency model.

He, of all people, should recognize that he is being exploited by the publishing companies and provided with freedom by Amazon.

Oh, well.


Anonymous said...

Oh, and I resent that Stross considers that I am part of the lunatic fringe who idolizes you. :) I guess the lunatic fringe reads Charles Stross books. And thinks Joe Konrath is right about self-publishing. Amazing, what?

The proof of the pudding is in the eating, as they say. Self-publishing has been very very good to me. I may be one of the outliers, but so is every legacy author who makes my yearly income off their royalties. (six figures, thankyouverymuch)


Anonymous said...

The current situation--and several author's reactions to it--exposes yet more exploitative behavior by publishers that so many ignore when they defend them, despite how much those same publishers are the biggest obstacle to their career. Every author who defends the publisher should ask themselves why.

1. Your career is based on pre-sales and first week sales? Is that what you expect as a writer? Why aren't you asking your publisher why that makes any sense for YOU (not them)?

The whole presale-first week sales-zomg-I-need-to-be-on-a-bestseller desperation is entirely a manipulation by publishers to justify reducing subsequent advances or dropping midlist authors. I never made a bestseller list but in one year I know for a fact I sold more books than two people who did. Who’s the bestseller? Guess who gets a lower advance?

2. Let’s assume you accept that premise that presales and first week sales make or break an author. Hatchette and every other publisher knows DAMNED WELL why you aren’t getting presales and high first week sales in this current situation. So why would you accept that as excuse come next contract time? If Hatchette says “Your presales sucked in May 2014, therefore we have to offer you a lower advance this time” and you say “But the low presales had nothing to do with my book and everything to do with how you did business” and they say “Anyway, how’s 25% less?” And that’s Amazon’s fault how?

3. I’m quoting this, not to embarrass this particular author, but because I think I have heard literally EVERY author defending a publisher say the same thing in some form:

"she(my editor) advocates for me tirelessly in editorial and marketing meetings. She fights for my books, she fights to bring my books to you. She is everything an editor should be, and it’s largely because of her faith in me that I can write full-time and pay my mortgage."

Advocating your book is your editor’s job. I’m not impressed when you tell me your editor is doing her job, and I don’t think that is a good enough excuse to turn a blind eye to exploitative behavior. She fights for your books? Why? Why is your editor “fighting” to do her job in her own company? You don’t have a contract with your editor. You have one with your publisher. Why isn’t your publisher “fighting” for your books? And if it’s a fight, who’s losing? Another AUTHOR who has a contract with expectations that the publisher is going to do right by them.

Her faith in you allows you to write full-time? Is her name on the signature line of the checks you receive? When the publisher downsizes and fires your editor, does your career end too?

The editor relationship is another publisher manipulation to hide egregious behavior. The editor is the warm friend who believes in you that the publisher wants you to believe represents how the publisher feels about you when in actuality she’s just the friendly face on the hydra that only thinks of you in terms of numbers.

4. You do know that Amazon pretty much invented the reader presale, right? And your publisher—which has no control over it—uses it as a club during negotiations with you, right? Did it bother you when you had no idea what your presales to bricks-and-mortar stores were because you’re just the author and that’s proprietary information? Did it bother you when your publisher’s sales reps push someone else’s books harder than yours because it will benefit his/her career, not yours? Does it bother you that the publisher has persuaded you to believe that your entire career is based on one number on one day per year?

5. You do know that Hatchette is negotiating to increase its profit margin, not yours, right? Your “profit” is locked in. They are not going to give you any benefit from the resultant deal. Thanks, Hatchette!

Burton said...

I don't blame these authors for hitching their wagon to Hatchette. It's like being married. Your wife will bitch about how lousy her co-worker is, and although you have absolutely no idea who was at fault for their spat, you automatically throw in with your wife. Why? Cause she's your wife. She might drive your car without refilling the gas tank one time too many, buy one too many shoes, and insist you can't play golf as much as you like, but damn, she's still your wife.

Same with authors and Hatchette, I suspect. Why would they so blindly defend such a bad marriage? Well, it's their marriage. What choice do they have?

David L. Shutter said...

Loved what the last Anon said. Especially this...

"The editor is the warm friend who believes in you that the publisher wants you to believe represents how the publisher feels about you when in actuality she’s just the friendly face on the hydra that only thinks of you in terms of numbers."

Sounds an awful lot like the "good cop/bad cop routine" you get at sleazy car dealerships.

Tony said...

Wait: so his publisher is going to trash careers over low presales, even though they know very well that in this case the low sales are due to a squabble between them and Amazon?

And these people are somehow the "good guys"?

I'm sorry, but if your publisher does that kind of thing they're scum on a level completely orthogonal to which party is in the "right" in this squabble.

Why would anyone continue doing business with people who are that reprehensible, much less defend them?

Tony said...

"Sounds an awful lot like the "good cop/bad cop routine" you get at sleazy car dealerships."

Same scam as the "hip" A&R dudes who screw young musicians on a daily basis. Your "buddy" gets you to sign the contract, and pretty soon you somehow owe the record company a ton of money even though you've got two platinum albums.

Stross doesn't have the excuse of being a naive 19 year old stoner, though.

Claire Chilton said...

I've been reading a lot about this issue, and the thing that really surprises me from both sides is that no one is looking at the factual data behind it all. Maybe only I noticed it? Well, I am the only indie who had pre-orders by the sound of it. (For info: They're not very exciting, and they kill your book's ranking on release day.)


Fact: Indies could have pre-orders on Amazon if they used a Nielsen ISBN (the UK ISBN vendor). You registered the ISBN and ta da, pre-orders on Amazon in print books only. Here's one I made earlier: www.amazon.com/dp/1908822295 (Aww my pre-order button has gone. Phooey! It was there a few weeks ago).

Fact: My indie title was on pre-order. It isn't anymore, and I have nothing to do with Hatchette. That book is pure indie all the way.

Fact: Amazon get's a lot of its sales data from Nielsen Book Data, which is why I think that little pre-order button used to slip in there. I think it was a bug, which perhaps a big publisher thought they got for some other reason other than a bug. But if that was the case, why would I have got it? *Waves her 'unknown indie/hybrid with no power at all' flag from the elite pre-order seats* Hello there. Was I not supposed to be here?

Fact: Amazon have been consistently updating their website and the operating system behind it for the last year. There are bound to be some changes that have a knock on effect.

So, you know, if you put all that together, it's proof that Amazon didn't single out anyone. The pre-orders probably went missing on many books, including indie books like mine, when the site got changed.

Since it's the ISBN that decides if your book is pre-order or not, it's probably a change in the ISBN data that feeds through to the Amazon site that is the cause of that button going missing.

I mean, unless Amazon targeted Hatchette over a contract dispute, and just threw my book in there because I'm loud and sometime irritating, but I don't really believe that. I'm pretty sure Amazon don't know I exist. It's possible, but I don't get the feeling that Amazon have a gripe with me, so I think perhaps it was just a bug fix going into play there.

So, if the pre-order complaint is untrue, which it seems to be based on my data, then is the '2-3 weeks out of stock' thing just that the distributor is late? I mean, I get 2-3 weeks delay on my indie titles if I don't publish them on CreateSpace, so how is that different from what Hatchette are getting? There's a whole forum on CreateSpace about how if you publish on Lightning Source, your book can go out of stock on Amazon, so it's best to stick a copy on CreateSpace too to cover your ass.

Also, the third thing: Recommending other books. WHAT? Amazon don't have a book in stock, so they're trying to sell the reader something else? What are they doing, TRYING to keep their customers? What's that craziness about? <-- slightly sarcastic moment. Why wouldn't a book store advertise other products if one is out of stock?

Seriously, THIS has the publishing world going crazy?

To me, it just looks like Amazon updated their ISBN data on their website. They have the usual delays that come from outside distributors, and they are using their promotional tools to keep their customers when a supplier let's them down.

So basically, they're doing what a book store does.

Perhaps Hatchette had an advanced account with more attention paid to certain aspects of their books. Perhaps it's been set to 'indie status' during the negotiations. I really don't know, but basically they're complaining that their books are getting the same treatment that every indie book gets.

I think Amazon treat indies quite well. What are they complaining about?

I just wondered if anyone else was going to mention that because it seems kinda relevant.

Joe Konrath said...

Amazon responds:



So they offered to help Macmillan's authors when they removed those buy buttons two years ago. Since we never heard shit about that, I suspect Macmillan doubt declined the offer, and fucked their own authors (which Amazon was willing to support during the negotiation crisis.

Now they are making the same offer to Hachette.

We'll see how Hachette responds...

Jeramy Goble said...

I love Amazon's post/offer. I think the gatekeepers are definitely worried and for whatever motive, some of the big-time legacy authors feel compelled to stick up for them.

Joe Konrath said...

And Charlie deleted my comment.

He's a coward.

I can't wait to see how he responds to Amazon offering Hachette authors a stipend if the publisher kicks in 50%.

What if Amazon ponied up a few million bucks? Would Hachette match it?

Alixjune said...

Apropos of nothing-- I recently got on a Simon Brett (British cozy mystery writer) kick, fueled by many of his books being on Audible.com (owned now by Amazon). You know how it goes... I had to read everything the guy has written, good, bad, recent, ancient. Compulsion.

So I went to Amazon. I always buy new if I can, as I know that (like the royalties on Amazon) will send at least a bit to the author. But most of his books-- even the ones 20 years old-- were only available used. So I bought them used, except for the single one available for Kindle.

Point is... every one of those books-- unavailable from the publisher-- should be available in a way that benefits the author-- that is, indie-pubbed.

Then I went to my own author page. All those OOP books... available used. But also available NEW for Kindle... and I get 70% of those.

You might ask why I don't hate Amazon. Well, it's because not one of those books when I sold to the big publishers earned me enough for a vacation. (4% royalties-- yes, major publisher.)

I put all the Amazon KDP earnings this past year in my "holiday account." In July, I'm flying first class to Europe.

Out of print books are useless to publishers, and yet they cling to the rights. But for authors... they mean new publication, new readers, new royalties.

Yeah, Amazon might end up being Darth Vader. But I doubt it. And anyway, right now, well, I'll send them a postcard from Rome. :)

Anonymous said...

It's late, I'm tired, but I wanted to add this point.

Mr. Stross said "And after a while, there will be no more Charlie Stross novels because I will be unable to earn a living and will have to go find a paying job."

Now, even my little library has half a dozen of his books so I know he has a heck of a back catalog. I just looked at Wikipedia and it seems like it's somewhere around 30 novels. Like I said, I'm tired so I didn't read the entire entry and I could be off on that count.

Lilith Saintcrow has 25 titles on her Wikipedia page. She has taken to Twitter tonight to say “I can’t even. Time to go play some piano and pretend a giant corporation didn’t just openly announce they’re out to f*** up my livelihood!”

It's beyond me to be clever at this late hour. So I will just be blunt.

It's a sad statement on traditional publishing that these authors don't have significant financial comfort from sales of their huge catalogs of titles.

Kilburn Hall said...
This comment has been removed by the author.
Kilburn Hall said...

Note to Greedy publisher's and author's like Hanchette, Little Brown, James Patterson, and Scott Turow:
The writing is on the wall. Here in the 21st century, traditional publishing houses and brick and mortar bookstores have gone the way of the dodo. Amazon has made it clear that when they negotiate with suppliers, they do so on behalf of Amazon customers- not Hanchette, Little Brown, James Patterson or Scott Turow customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for Amazon customers in the medium and long term. Traditional publishers and some authors are greedy and have closed the door to new authors the last 20 years. Amazon, Smashwords, and other online booksellers have leveled the playing field and are doing so well that "old school" greedy publishers and authors like James Patterson, Scott Turow are freaking out as they see their $$$ bags of moola disappearing.
Way to go Amazon. You do a great service for new authors like myself by offering higher royalties on KDP and offering Amazon readers low prices by aggressively bargaining for discounts with the greedy publishing corporations who got caught by the feds price fixing with Apple.

Chris Hollis said...

Well, at least one person isn't convinced by Amazon's latest statement: Lili Saintcrow.

Still cutting the vowels out of people's comments, I see...


Marcel said...

I'm *so* tempted to post a comment on Lilith's blog: "You went full retard. Never go full retard." because it's almost as legible without vowels :)

Chris Hollis said...

...or insult her lack of rhythm. Disemvowelling proof.

David L. Shutter said...

"It's a sad statement on traditional publishing that these authors don't have significant financial comfort from sales of their huge catalogs of titles."

I didn't memorize it, but the new Author Earnings report suggests that BigPub backlist (think of all those life of copyright contracts you keep hearing about) as being a significant factor for these record profit years we keep hearing about.

Did Patterson Inc's dozen or so 2013 titles sell so astromically well, resulting in his +$90mil earnings? Or did his massive backlist, going back to the 70's, highly priced and available in e-book, contribute heavily to that banner year? I also think it's a safe bet that a higher than avg. royalty rate for the reigning sales king helped out too.

E-book world benefits BPH's every bit as much as it does indies. Even the most modest of sales (especially on high priced e-books) across an ocean of backlist still equals obscene amounts of money.

Just not for the avgerage tradpub author, it would seem.

Ted Atchley said...

Funny thing about markets, especially in the technology realm. Today's unstoppable juggernaut can become tomorrow's antiquated technology. Years ago, in the ancient times when the world had not yet heard the word, iPhone, there was a company called Microsoft. They were accused of being a monopoly and to be honest they did some pretty bad things with their market power including treating their customers poorly. Then comes along Apple and suddenly the place Microsoft dominated, the PC, wasn't all that important anymore. Back then we couldn't conceive a world without the PC desktop as the dominate device. Now we can conceive a world without the desktop.

James said...

It's hard to see a 7BILLION dollar multinational corporation as being the "David" in a David and Goliath story.

Yes, Amazon is huge. But so is Hachette.

It's more like Goliath vs. his kid bro Goliath.

Larry Mitchell said...

great points and discussion. Found your blog from some other posts. I agree completely with everything you say. I really like Stross's Laundry series, but I can't read any of his non fiction. He is much too full of himself and his vaunted opinion. Such a blowhard.

As well, to not debate you makes him a sad petty little man.

Good health and good fight Mr Konrath

Anonymous said...


Your experience is par for the course with Charlie. He's part of a group of SFF authors who cannot abide dissenting opinions on their blogs. Politics, diversity, religion, Amazon/Indie, etc. You either agree with their (typically left of center) viewpoint or the comment is moderated out. Except the over the top dumb ones... they go through so the blog regulars can laugh at what idiots they are on the 'other' side.

It's sad. I always thought major authors, especially SFF authors, were more open minded than that.

Christopher Mercier said...

I think there's a lot of the situational stupidity and Stockholm Syndrome going on...

...But I also think it's a little more cynical than that. Some of these authors have "made it" and many of them have become snobs for it. Now that they're part of the establishment, their product is good and relevant. Anybody who is rejected or chooses to go indie is simply a slovenly philistine who doesn't deserve to be heard.

In that way, they have to defend the machinery that feeds their egos. And attack the avenues (the free market) that indie authors and publishers use to move their art, products, and businesses.

And Joe, I think your blog has done a lot to convince me to start vetting my work for indie publishing. This post was much appreciated for its snarkiness - at this point, these arguments trotted out by the Big 5 are worth of ridicule.


Anonymous said...

It's funny to see a leftist like Stross shuck and jive for his corporate master. I don't mean to bring up politics-- no matter who you vote for or which ideologues' books you have on your shelf there is much for an intelligent person to be disgusted with in the entirety of today's political spectrum-- but I call it like I see it. Stross accuses others of knee-jerk reactions when part of his opposition to Amazon happens to be his socialist conditioning against big businesses. Of which Hachette and the conglomerate it belongs to aren't if it pays a left-wing author money, apparently.

That Amazon has ushered in a democratic way of allowing just about anyone with an idea to not only get published but to earn some money off their intellectual labors is something for everybody of all stripes to rejoice in. Especially those of us who distrust large corporations.