Friday, June 13, 2014

The Hachette Job

William Ockham linked to Lagadere-Hachette's Investor Day Presentation Brochure from May 28 on Twitter.

(Note that this presentation came after Amazon stopped stocking Hachette titles and removed pre-order buttons. So all of these things were said to investors while Hachette was in the midst of negotiations with Amazon.)

What interested me most started on page 25. Since investor-speak is often difficult to understand, I'll attempt to translate into English.


Translation: We colluded with other publishers to fix ebook prices.

Ensuring availability of ebooks on all platforms and formats

Translation: By "all" we mean "all but the biggest platform and format, Amazon."

Supporting competition among e-retailers to avoid dominant position in the value chain

Translation: Force all e-retailers to accept our pricing structure. Then Amazon won't be able to discount our ebooks anymore.

Joe sez: I love the line "supporting competition". Because that's what all good businesses strive for; to help our competitors.

Agreement with Google for out-of-print books

Translation: Now books will never go out of print!

Joe sez: Why is there even an out of print reversion clause in contracts?

Agency model implemented with e-retailers thanks to Hachette Livre’s size and Anglo-
Saxon presence in order to retain control over ebook pricing

Translation: We're gonna make Amazon agree to agency pricing again.

Joe sez: Is this what you want, Hachette authors? For your publisher to price your ebooks at $14.99 again?

Also, I love the line "thanks to our size and presence." When Amazon uses its size and presence, they're a bullying monopoly. But when Hachette does this to force retailers to accept their pricing structure, it's a bullet point that investors are meant to applaud.

Cautious approach towards new business models

Translation: We don't innovate. We don't try anything new. Change frightens us.

Use of adequate protection mechanisms (DRM) with interoperable formats (Epub) which
are user-friendly

Translation: We have absolutely no clue what readers want.

Active search of illegal contents through anti-piracy tools limiting the proliferation of illegal

Translation: We have absolutely no clue that piracy can't be stopped, or even slowed.

Publishing benefits from consumer awareness regarding fraudulent nature of file sharing
and the existing legal frameworks against piracy

Translation: Because look how well it worked for the War on Drugs!

A publisher is a sifter: culling of contents, focusing on superior works among a high number of
projects submitted

Translation: We don't write any of the books we publish, but we justify out 75% digital royalty take because "sifting" is really important.

Joe sez: Because readers are too stupid to find books to read on their own.

Seriously... sifting? That's how Hachette is going to stay in business?

Does this mean every "superior" work that Hachette publishes is a success? That every work they pass up is doomed for failure? That their sifting skills are so unique, so valuable, that millions of readers seek out the Hachette brand based on their imprimatur?

Did the investors wear hip waders to this meeting to avoid getting the waist-high bullshit on their shirts?

Traditional publishers remain more attractive − Bestselling authors need exclusive services
(advances, editorial expertise, marketing and sales clout…) not offered by new publishing structures

Translation: We're really essential! Really! Millionaire authors would never think to hire out any of those services for a fixed cost. They'd rather let us keep the lion's share of the royalties for their lifetime plus 70 years.

− Rare self-published authors proving to be successful subsequently looked for a traditional publisher in order to increase their sales

Translation: Self-publishing isn't a threat. There are still enough authors who want to sign with us, because they've never looked at or read Konrath's blog.

Ebooks share of total sales in the USA should continue to increase but at a lower pace to
stabilize between 25-35% by 2017

Translation: Because we said so.

After all, look how other tech markets stabilized. That's why there are still travel agents, 35mm film, cassette tapes, dot matrix printers, VHS, paper maps, phonebooks, TV antennas, encyclopedia sets, and buggy whips.

Joe sez: This is called "existence bias". Hachette believes paper books will continue to be a major part of their business, and never bust like all the above obsolete companies did.

Can you imagine a Xerox investor meeting where it said that desktop printers were going to stabilize, so don't worry, we'll still have coin op copy machines everywhere?

With a forecasted digital penetration of the market of <40%, publishing will still be driven by print book sales: the complexity of the business will remain and won’t be acquired by new players.

Translation: Notice all those villagers outside our castle with torches and pitchforks? Don't pay any attention to them. They're harmless.

Joe sez: How can Hachette actually believe this? Self-pub has grabbed a healthy share of the market. My Amazon published books have sold over 300,000 copies (those don't include my KDP). New players are eating Hachette's lunch.

Publishers need size and muscle in order to keep control over relations with authors,
over pricing and distribution

Translation: We'll keep those pesky authors in their place, and retailers will do what we say.

Joe sez: In a 52 page report, authors are mentioned on only 13 pages. The report never mentions how Hachette plans to keep authors, or find new authors. The only time it mentions author relations is "in order to keep control".

If you owned a dairy farm and were talking to stockholders, wouldn't you focus a large part of your presentation on the cows? That's where the milk comes from, after all.

CONCLUSION - Digital modifies the market environment of publishing but represents an opportunity for publishers, whose role remains central

Translation: We're relevant! We said so four years ago, remember?

Joe sez: The only central roles in publishing belong to readers and writers. Third parties can take a cut if they provide value.

Hachette does not provide value for the majority of its authors. Right now, it is trying to force the agency model on Amazon, which will raise ebook prices, hurting authors and consumers. It offers poor royalties and unconscionable terms (out of print reversion clauses, next option, non-compete).

My advice: dump your Hachette stock immediately.

Hoping authors remain uninformed and continue to take bad deals is not a viable long-term business plan.

Stating that digital will stabilize when history shows new technology always ultimately dominates is downright stupid.

Refusing to innovate in any area at all is a recipe for extinction.

I said it years ago. Hachette, and Big Publishing, are selling drinks on the Titanic. They'll make a few more bucks before the ship goes down. But the ship will go down.

And to you authors who keep signing publishing deals: good luck trying to get your rights returned when your publisher goes bankrupt and they're sold as assets to pay off creditors. But in the meantime, make the most of your awful royalties, terrible contract terms, and lack of control over your career.


Mitchell Nelson said...

I think this line summed up my feelings pretty well:

"The only central roles in publishing belong to readers and writers."

That's why I can't even make myself care about this issue. Even if Hachette wins against Amazon, they're a long way from winning against progress. We just don't need them anymore. And, since there's no way I'm ever signing with a major publishing company, I don't care what happens to them. They can do what they like. Doesn't matter to me.

Barry Eisler said...

Holy shit, that was hilarious. The sifting! The sifting!

But you should have called me! You know fisking Hachette is one of my favorite hobbies...:D

It's okay, though. I know they'll be back with further atrocities against plain English and common sense...

Paul Draker said...

And then there's this little gem buried in the Hachette slides:



"Publishers need size and muscle in order to keep control over relations with authors, over pricing, and distribution"

So... they need muscle in order to keep control over relations with authors?

Yeah. Good luck with that ;)

Joe Konrath said...

Ha, Paul!

I was just adding that to the blog while you were writing your comment.

Paul Draker said...

Hey, Joe :)


Clearly this presentation was intended for Hachette's investors rather than their authors.

Craig Hansen said...

Another great fisking job, Joe. ;-)

Eyes and Ears Editions said...

We LOVE their term "Anglo-Saxon" opposed to their Norman, Burgundian, Alsacian or Aquitanian?

Gary Dobbs/Jack Martin said...

I agree with all of your points here but what concerns me is that Amazon may become the only player in the digital book world. Now I love Amazon and think most other companies could take a lesson from them, but I certainly wouldn't want them to become the be all and end all of the digital book world. Are Amazon right or wrong in the Hatchette row? I'm not sure but I think that given the fact that they have such strength they will be seen as the bad guys. It's so easy to knock Amazon at the moment...just as it was easy to hit Border, Barnes and Noble etc back in the day when they were hammering independent book shops.

William Ockham said...

Random observations:

They only mention readers on 3 pages.
They mention piracy on 3 pages.
They are still in the process of adopting CRM. WTF? Hey Hachette, the '90's called and they want their IT trends back.

Jeff Ezell said...

Thanks for your thorough fisking, Joe. It gives us another inner view of the nonsense the legacy boys continue to spew while ignoring the "raw materials" of their products...authors.
Will there always be paper books? Probably, as long as customers want them. Legacy still owns the bookstore distribution model for paper. And owns their authors. But how long can this last? Indie publishing is taking away more legacy raw materials daily as authors make better business decisions, choosing a better path for themselves.
Keep shining the light, Joe.

William Ockham said...

Every "investor day" presentation has a pitch slide that serves as the key to understanding the whole thing. It answers the question: "Why is this company a good investment?"

Hachette's answer is:

With a forecasted digital penetration of the market of <40%, publishing will still be driven by print book sales: the complexity of the business will remain and won't be acquired by new players

Imagine how that could go wrong. Not just ebooks surpassing the forecasts, but erosion of the print business to things that aren't counted as ebooks. And what if the complexity of the print business is reduced substantially? Or what if a player emerged that was better than Hachette at print distribution but had a much lower cost structure?

I believe that all of these things are more likely than not on a five year timeline. Ebook market share is higher than they think because they are missing the self-pub share. That means that the shape of the curve is different. Ebooks are growing faster than they predict.

The non-fiction side of the print business threatened by things that aren't ebooks. The technologies and skills required to deliver online learning are so far beyond a publishing company, they can't even find the competition.

And on the distribution side, the print business is so far behind the state of the art I think the big players don't even see it as worth the effort. Nobody wants to tangle with Amazon for a market that is as small as print books and shrinking. But a retailer who doesn't compete with Amazon could make a killing (Hello, Starbucks, I am looking at you. Amazon is just down the road.)

The biggest long-term threat to Hachette is the next James Patterson. A bestselling writer who knows business and wants to maximize their franchise earnings would decide to destroy the Big 5.

John Ellsworth said...
This comment has been removed by the author.
liebjabberings said...

Aww, Joe - why did you have to warn Hachette what's coming to them?

Now they'll be able to go out there and make proactive changes, and we will all be the worse for it.

Keep hammering away - and thanks for protecting us. I still have friends who can't wait to get themselves into the shoot where an agent can pick them out of all the dregs as worthy. And one of them's a lawyer. Wonder what'll happen if an actual contract is ever presented to sign - maybe this lawyer will read it, from sheer force of habit, and finally recoil in horror.


Josef Black said...

“Publishers need size and muscle in order to keep control over relations with authors over pricing and distribution,” Hachette said.

So kind of like the size and muscle Amazon has to keep control over relations with publishers over pricing and distribution which Hachette complains is abusive?

Some organisations who used size and muscle to try and control their subjects to prolong their survival:

Slave traders
The mafia
The soviets
The nazis
Drug Barons

Great business plan Hatchet, don't worry about improving your terms to your slaves, just continue to bully and muscle them into submission.

And with a statement like that you are calling Amazon evil?

You are a standing army being absolutely routed by an insurgency and your answer is more tanks and barbed wire.

Good luck with that.

Jennifer Oberth said...

Another interesting thought along business lines, Hachette (and other traditional publishers) wouldn't have a good sense of what's really going on with authors because they likely only get authors who want to be published through them.

I know I don't want to do business with them so I don't bother. If I did, if hundreds, thousands of authors sought to be published by them and then when we got the contract, refused to sign it, they'd sit up and take notice. They'd be forced (forced) to change their contracts. But nobody cares to waste their time doing that and Hachette (and other traditional publishers) think we're not out here. (Or they don’t care because they don’t see other authors as a threat to their business because, again, the authors coming to them want them.)

It's like police who only see bad and start to think 100% of people are bad because the pool of people they're constantly dealing with is bad. Hachette thinks 100% of authors want to do business with them because 100% of the small pool still seeking publication through them, want to do business with them.

Traditional publishers know this, they have to. They just don’t care but what good business sense is that? I’d be okay with them taking advantage of the situation they’re in – decades of being the only game in town makes for an easier transition but they have to change. How can they be in business for decades and the minute something shifts the industry, they can’t compete? And the reason they can’t compete – because they don’t want to – is pretty lame. It’s getting embarrassing. Traditional publishers could have used the influence and money they’d made for years and years, held their heads high and responded with cutting edge solutions.

Eventually, the pool of authors seeking traditional publishing will run out. Like Joe says all the time about treating authors like cattle, once the cattle disappear, you’re out of business. One of the reasons I have no interest in doing business with traditional publishing is because they are so out of touch with what’s going on. That does not make a good business partner.

J.M. Ney-Grimm said...

So Hachette tells its investors: we're strong and making money hand over fist.

While it tells its authors: we're weak and big bad Amazon is whipping us from pillar to post, as well as ruining your chances.


Jennifer Oberth said...

J.M. - that's right! Great point.

Bardic said...

@J.M. - "Amazon is whipping us from pillar to post"

Quick, someone tell Marc Cabot we have a new story plot for him! Amazon whipping publishers into willful submission... lol

Gary Jonas said...

I think Hachette is much more in touch with the current situation than most indies are giving them credit for. They mention self publishers in an investment brochure! Yes, that needs an exclamation point. The fact that they felt they needed to bring that up speaks volumes. This would not have happened a year ago. I'm willing to bet they've been going over the data at the Author Earnings site, too.

Other than that, the only thing worth mentioning from this is the agency pricing comment. That means it's likely the sticking point between Amazon and Hachette.

The rest is typical sales copy slanted toward investors. The Google comment means nothing because any author who has OP books and hasn't retrieved those rights would see that deal as a good thing, and anyone signing with the Big Five now will never get their rights back anyway.

Patrice Fitzgerald said...

The "Large Anglo-Saxon Players." Are they one of the World Cup teams?

Thanks for the fisking, Joe, and William of Ockham. Between the sifting and fisking, frisking and shifting, I think I'll just go write more books and make more money. Don't have time to sift through all this bullshift from Hachette...

Nirmala said...

William Ockham said, "Ebook market share is higher than they think because they are missing the self-pub share. That means that the shape of the curve is different. Ebooks are growing faster than they predict."

And then this article came out today saying self-published ebook sales increased 79% last year in the UK:

From the article:
"Self-publishing is absolutely still booming," he said. "You can see print books down, and ebooks as a whole up – but a lot of that is driven by self-publishing, which has a much higher growth rate."

w. adam mandelbaum esq. said...

From Merriam Webster re: definition of legacy...
something (such as property or money) that is received from someone who has died
One could do a whole lot with that.
So I did--a poem.
Those who still seek legacy deals,
Their name is truly Legion.
Those who get a legacy deal,
Also get
A contract of adhesion.

Alan Spade said...

"While it tells its authors: we're weak and big bad Amazon is whipping us from pillar to post, as well as ruining your chances."

They go further than that, J.M.: they tell their authors that for ebooks, they hugely rely upon Amazon for their sales, like 60% in the US and 78% in the UK.

Hachette's business seems to me like a big cheese: on the outside, it seems strong. But when you go inside, it is nearly entirely hollow, eaten up by a mouse named Amazon.

The crust are the bestseller authors like Patterson.

In the years 2000,when they signed with Hachette (or one of its susbisdiaries) midlist authors realized how large was the hole, and that almost nothing remained for them. And now the hole has enlarged again. Now, there is only the crust remaining.

Stephen T. Harper said...

"Hoping authors remain uninformed and continue to take bad deals is not a viable long-term business plan."

“...good luck trying to get your rights returned when your publisher goes bankrupt and they're sold as assets to pay off creditors.”

This is why I’m grateful every day that I simply lucked into coming to the industry just in time.

I was looking, I was querying, I was going to conferences… and the whole time thinking, oh my God, is this really what this business is? It was so clearly a top heavy mess. It seemed like a pyramid scheme, really. And my only option was to bust-ass for god-knows-how-long just to (maybe) get in at the bottom.

Then Kindle happened. I stumbled across this blog and others. All my fears were confirmed, but another window was opened.

Desmond X Torres said...

Blogger William Ockham said...
The biggest long-term threat to Hachette is the next James Patterson. A bestselling writer who knows business and wants to maximize their franchise earnings would decide to destroy the Big 5.

A version of this concept has been tumbling around in the clothes dryer of my brain for the last couple of weeks.

What if a group of authors with the followings like King, Grisham, Steel, Koontz and Evanovich decided to pool resources and sell their work through their own publishing house? It’s about the money, and were they to give fair remuneration to authors (because isn’t that what it’s ultimately all about?) I think they would earn a stellar profit, and there would be a stampede of already established writers going to them.

Then find the next Meyers, Rowling or E.L. James? Yes, I realize that part’s luck… but still.

I believe such a model would in a relatively short time turn TP inside out. If Hachette’s newsletter is reflective of such a calcified mind set, I don’t see how they could survive.

Yeah, I know—it’s a pipe dream. But it was done almost a hundred years ago in the movie business when United Artists got off the ground, started by four Hollywood heavyweights.

One data point said...

Thank you, Joe. I have been lurking around here for a couple of years. You have taught me a TON. This month, I published a study guide for students and am working on other projects (including a course at Now I am encouraging others -- including a guy I met at a conference last week -- to follow their dreams, complete their projects, get them out there. One is a woman I work with, who has a 3-volume novel series in her (for starters). I am trying to help her get the first volume out for Christmas. My teenager has a friend who writes poetry. Will I help her format her book for publishing? Of course. The guy at the conference? A faculty person who wants to write a study guide for his students. (And maybe has an idea for a novel he kinda wants to do, maybe.) He never even knew he could have permission to dream.

Most of these things y'all will never see (never mind Big Publishing), but they are a direct result of this blog and the others out there. So I want to say, thank you Joe et al. for your kindness and encouragement. You are making our dreams come true.

Joe Konrath said...

The Google comment means nothing because any author who has OP books and hasn't retrieved those rights

You're assuming the can, Gary.

It's been my experience that getting rights returned is near impossible.

Anonymous said...

I think you missed this interesting line in the Guardian article:

"Self-published books still account for a tiny proportion of the overall market – 5% of the 323m total books bought, and 3% of the £2185m spent on books last year."

Lots of things can be extrapolated from this.

But one is that Hatchette is not a self publisher and therefore has considerable leverage in the market, even with Amazon.

On the upside, there's a lot of room for growth when it comes to Self Publishing.

The other thing to remember is that King, Patterson, Rowling and other famous authors were selling books long before Kindles came along.

While someone might pay a couple of dollars for a Konrath book and consider that excellent value, a fan of Stephen King's might be very happy to pay much more for his latest work and have pretty much the same feeling.

People don't always buy cheap, which is why designer brands are big business. A lot of different elements go into giving something value and price is just one of them.

Joe argued that any business report on farming might expect to be filled with lots of mentions of cows. I doubt that is true.

Corporations do not care what they sell. Cows or books are just units. Money is what will feature heavily in any investor report. And that seems to be what Hatchette features in theirs.

Hairhead said...

Agree with everything, except "Hachette are serving drinks on the Titanic."

Actually, what is happening is that they have thousands of authors trapped in steerage, locked behind the bars of their lifetime+70 years contracts, all about to be drowned when the Titanic goes down and their copyrights are sold as assets.

And up on the deck, their trustys (Patterson, et al.) stomp around, threatening successful authors who are eying the lifeboats and even the railing, contemplating their chances of survival.

Meanwhile, down in the calm water, rowing away from the sinking ship, indie authors are calling out for everyone to come in the water's fine! Hachette responds by shooting at them from the deck.

I think that image is more accurate -- er, more complete. After all, Hachette ARE serving drinks, to a bunch of rich, overstuffed ignoramuses sitting on their deckchairs and admiring the view of the stars.

Kell Brown said...

At some point don't we have to acknowledge that these authors are adults, most of them quite clever, that they read and understood the contract (or if not hired someone to read and translate the contract for them) and they signed on the line that was dotted.

They were offered money and apparently in the vast majority of cases not life changing money either so it's not like they didn't have a choice.

I don't agree with or condone the reported behaviour or business practices of traditional publishers but these authors went willing into the arms of the Great Satan.

I think casting these authors as poor victims (there's exceptionsI'm sure) of Hachette rather than partners is a mistake.

You sign a contract and you live according the terms you agreed to. I don't think makes Hachette evil or their authors stupid or gullible.

Jill James said...

"drinks on the Titanic" is my favorite line. Thanks for my laugh of the day.

Eyes and Ears Editions said...

Drinks on the Titanic, or to quote the Muppet Treasure Island, "Margaritas at the Midnight Buffet," only the bells have tolled way past midnight, I think.

Alan Spade said...
This comment has been removed by the author.
Alan Spade said...

"I think casting these authors as poor victims (there's exceptionsI'm sure) of Hachette rather than partners is a mistake."

I think we should be more pedagogue than that. This is the newbie guide of publishing, after all. Yes, they have signed. With the Great Satan, yes, although they do not call it like that in their mind.

In their mind, they call it Mainstream Publisher. Many people are in a prison of their own, for them, it's mainstream or nothing. They have been formatted like that. They don't want to be a rebel. So you have to educate them, again and again. Between 10 legacy published midlist authors, maybe only two will hear you and understand. Joe speaks for those two, in my opinion.

Paolo Amoroso said...

"Nurture and sift" may be a good motto on Big Publishing's coat of arms.

Alexander Mori said...

"At some point don't we have to acknowledge that these authors are adults..."

I agree with Kell Brown that authors on some level are responsible for the choices they make. But for so long, there was only one choice to make. Aspiring writers could either sign a bad deal, or seek another line of work. And Hachette is trying to stifle progress by keeping control over that one choice. Ironically, they can only keep control if the writers they exploit continue to let them do so.

Which leads me to a discussion of identity, which Joe has discussed before. There are still many people who believe that there are writers (ones who have been sifted by traditional publishers) and there are self-pubbed writers. For some, there is a stigma attached to being a self-pubbed writer. Aspiring writers are learning that there is now another option available to them. But, the struggle of identity (Am I truly a writer if I pub my own book?) still remains for some.

So I believe educating writers to the Big Publisher Craziness is a good thing. But I also feel we need to change the perception (oftentimes negative perception) of the indie writer. Not necessarily to the public at large, but to writers themselves.

Say it with me, friends: I'm an Indie Writer, and I'm proud!

Melanie said...

Paolo Amaroso: ""Nurture and sift" may be a good motto on Big Publishing's coat of arms."

*snort* Sorry, but I flashed to the Decepticon from the first Transformer's movie. On the side of the cop car was "to punish and enslave." That fits so well as a motto for Big Pub.

w.adam mandelbaum said...

Mori-absolutely. A buck earned with legacy has the same spending power as one indie earned. A reader earned through legacy however, has after purchase, less spending power than an indie reader after purchase. Everybody is a winner with indie.

Susan Ring said...

I turned down my free ticket aboard the Titanic!
Moving Indie with my memoir ~Oh Yeah!!

Peter Spenser said...

Re: Barry Eisler’s comment about Hachette’s “further atrocities against plain English.” I have to shake my head at a (supposedly) professional word-and-language-centric organization like Hachette publishing a paper (that’s intended to convince people to give it money) that contains the pseudo-word “forecasted.” There is no such word, except in the minds and vocabularies of illiterate writers. It’s “forecast.”

There’s no such word as “casted;” there’s no such word as “forecasted.” Noun, verb, past, present, future… it’s “forecast,” always.

Rob Gregory Browne said...

Anglo-Saxon Players?

mir said...

A fisking of the Hachette Investor Presentation. Dude, you started my weekend off with a bang. Thanks.

Chris Meadows said...

Hey, just for fun, try this.

Go to Google and type in "Lagardere stock quote". Then hit the "three month" option on the chart that pops up at the top of the search results. Look at what the stock price did between May 7 and May 8, when the news about the Amazon conflict broke, and what it's done since then.

Next, try "Amazon stock quote." Compare and contrast the results. I think you'll find it instructive.

Cathy Keaton said...

The Rath of Kon.

Selena Kitt said...

Hatchette treats its authors poorly. Amazon treats its workers poorly (the ones packing up all those boxes so Amazon can ship Prime at a loss - er - discount?) Neither of them should be held up as a paragon of business ethics. Elephants fighting. We're still the grass. Someone is always getting trampled underfoot.

Anonymous said...

Amazon's massive free music dump for Prime members Thursday only endears them to loyal customers even more. I've been listening to Dylan and Joplin and a zillion other great artists (as well as some cheesy 80's power ballads for nostalgia) over the past two days and loving it. They are very smart because an addition like this feels like a totally free gift, even though you are already paying for it with your prime membership.

Now THAT'S how you create customer loyalty and a strong sense of value while still making a nice buck, Trad Pub! Actually IMPROVE your product, without raising the price. Make the initial price reasonable, then give people more than expected for their money.

I think Amazon just won the public relations war over this. People might like some Hachette authors, but nobody in the general public could care less about Hachette. And Jimi Hendrix trumps James Patterson, every time. :)

Laura Resnick said...

Chris Meadows, I implemented your suggestions, and I see what you mean. Instructive. Both stocks went down then... but Amazon dipped while Lagardere nose-dived. Amazon has recovered, Lagardere not so much.

The other instructive thing I noticed, if I am reading this correctly, is that Amazon's stock price is more than a dozen times higher than Lagardere's.

Laura Resnick said...

P.S. And I call dibs on "Anglo-Saxon Presence" for my next band name.

Russell Blake said...

My takeaway is a little different. Is Hachette clueless? Yes. Are they malevolent? Only in the way all large corporations are. Compared to Wall St or the military/industrial complex, they're pikers.

But the thing that most miss is they're posting record profits, and horse and buggy manufacturers didn't, that I know of, as their business evaporated.

They're doing it at the direct expense of authors with the 25% royalty, but that's neither here nor there. Nobody held a gun to those authors' heads. They made a deal they thought was good at the time (or still do), and they got screwed. It happens all the time in business, in the market, etc.

I do think that trad publishers be around for a long time in their present form. They have a tremendous inventory of titles at ridiculous royalty rates, so have years, or decades, of staying power.

None of which matters a whit to me as an indie author. The fact is I'm earning more than 99% of all published authors. Probably more like 99.9%. As are dozens of romance novelists, sci fi, and thriller novelists that I know of. And of course, Joe and Hugh.

My point being that it's now possible to earn a handsome living as an indie, completely outside of the mainstream publishing environment, and to do so on your own terms. That's exciting stuff.

I personally hope that Amazon loses and Hachette forces prices back up to nosebleed levels, because the only one it will ultimately hurt is Hachette (and its authors, who are vocally supporting Hachette). Who will it help? Me and all other indie authors. And readers, who already have so many choices they couldn't read a sliver of them in ten lifetimes, and thus are likely to look at $6 books as a deal in light of the higher prices the trads are charging, and simply forego the trad offerings in favor of mine. In point of fact, if I ruled the world, I'd have all trads colluding like mad to keep prices as high as possible (which they arguably are, so yay me ruling the world). Business was awesome while they were doing so with Apple - those were the golden years for indies. I'd write my congressman tomorrow (if I had one) and get the petitions started: Force Amazon to accept agency pricing NOW!!!

Then again, I'm a greedy bastard who's purely driven by self-interest, and I recognize that trad pubs aren't going away, that left to their own druthers they'll turn an interstitial opportunity like self-publishing into a massive money maker for enterprising indies (they already have, but with higher prices from them, they could sweeten the pot even more!), and create an environment where a smart fella can not only make a nice living, but start ancillary/complementary businesses that rely on one premise: Trad publishers will do anything to maintain high prices and pay crap royalties.

Still, it's fun to read the fiskings. They're generally on target. I just draw a different conclusion as to what it all means.

Pray they remain clueless, because with your competitor clueless, you can walk away with his wallet while he's backslapping his cronies for being the smartest guys in the room.

I think Sun Tzu said that.

Mir Writes said...

I think trad pubs will persist because the number of folks who don't want to figure out how to do it on their own is likely large, as well as those who want the status of a traditional publisher. That pool of writers hasn't gone away. And the huge backlist that trad pubs have to put in eformat brings them moolah.

I do think they will have to transform, but not for a while. They still have all those aspirants who want to give away all their rights to have a book put out the old-fashioned way. And that's totally their right. As long as they are aware, why not? Do what you want. Unfortunately, as long as authors continue to run to trad publishers, they don't need to change the onerous contracts. Only if writers say, "No more of this crap," will they have to bend and evolve.

Meanwhile, the commenter above makes a good point: I kinda can't help but hope trad publishers charge 20 bucks for their ebooks. Then indies will sell more at 2.99 and 4.99 and, hey, even .99 and have a better chance to make fresh fans who can't be bothered to shell out for the trad offerings.

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ProLiar said...

Agency model implemented with e-retailers thanks to Hachette Livre’s size and Anglo-
Saxon presence in order to retain control over ebook pricing

Translation: We're gonna make Amazon agree to agency pricing again.

Joe sez: Is this what you want, Hachette authors? For your publisher to price your ebooks at $14.99 again?

Please, oh pretty please keep your prices this high.

Anonymous said...

On that stock price drop, it was caused by dividends going ex:

David Beers said...

I remember when Joe used to be...I don't know, more friendly. Now it just seems each post is him grinding his ax. Unfortunate.

Terrence OBrien said...

There is an odd notion many authors seem to have that writers are somehow different than other suppliers in the economy. Publishers tell them they are. These documents demonstrate they are not.

Terrence OBrien said...

If you fall for the ruse that your enemy is clueless, he has already won.

Russell Blake said...

Terrence: Having, a long time ago, eaten a number or established tech players' lunches for years as they flailed along trying to figure out what was going on, I can assure you that a balanced assessment that a player is clueless is not an indication that they can find their ass with both hands given a ten minute head start.

Broken Yogi said...

Hatchette treats its authors poorly. Amazon treats its workers poorly (the ones packing up all those boxes so Amazon can ship Prime at a loss - er - discount?) Neither of them should be held up as a paragon of business ethics.

This is a false equivalence. If one is to compare how the two treats authors, one should compare Hatchette's treatment of authors to Amazon's treatment of authors.

If one is to compare Amazon's treatment of warehouse-level workers, one should compare that to Hatchette's treatment of the same, which would include some warehouse workers, print factory workers, and so, including clerical staff. I doubt Hatchette or its outsourced print and warehousing workers are better off than Amazon's. Be reminded that Hatchette has a lot of that work done in China, where worker conditions are far worse than at Amazon. So I don't think an apples-to-apples comparison of how workers are treated would them come out even at all. Amazon is likely significantly better.

Plus, Amazon is building a large printing plant in the US so that it can do the printing for its own publishing division here, with its own workers rather than Chinese workers. So that should be counted in their favor also.

Anonymous said...

David - "I remember when Joe used to be...I don't know, more friendly. "

Can you possibly be serious? If you don't understand Joe any better than this you're just not paying attention. So here it is: Joe is a guy who cares way more about authors than most even deserve. He is about as "friendly" as you can get, if you consider a friend to be someone who sees you getting beaten up and steps in to try and save your ass. His anger at the bully is natural and completely justified. If a "friend" is someone who takes up your cause and fights for your best, well I'd say he's about as "friendly" as he could possibly be!

The only reason this issue keeps coming back up is because the bullies are relentless in their propagation of lies and distortion. So Joe takes them to task for it, every time. He is one of very few voices out there doing that consistently. He is outnumbered and out-gunned in every way except that he has the truth on his side. Go back and read the "I understand and sympathize" article. It has plenty of tough love, but is quite clear that he gets why trad authors defend the indefensible, and actually feels sympathy for people who present themselves as his enemies. I'm not sure how much friendlier the guy could get.

Unknown said...

Executive Summary:

We're going to make both authors and readers hate our guts. THAT will keep the peons in line!

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Jm Cornwell said...

How would you parse this, Joe?

William Ockham said...

Just in case anyone thought I was wrong about Hachette's intentions, here is a direct quote from their CEO, Arnaud Nourry, in a Q&A session about this presentation:

The [DoJ imposed] "period of discounting ends at the end of 2014”.

Hairhead said...

Urgghhh! Look this Salon headline: Amazon is not your best friend: Why self-published authors should side with Hachette
Indie authors will benefit most if Amazon loses its war with traditional publishers

Read the whole thing if you must at

tl;dr = If Hachette has to bring down its prices, then all the indie authors will lose, because the only reason indie books sell is because they're cheap.

Hairhead said...

If anybody is still checking this blog comment, salon FINALLY has a much more realistic article on the Amazon/Hachette mess.

Danielle Blanchard said...

Are publishers blind or just dumb? Have they not learned anything from the recording and film industry?

Records gave way to 8-tracks which gave way to tapes which gave way to CDs which gave way to MP3s which have lost a share of their market to companies like Spotify.

8MMs gave way to beta which gave way to VHS & laserdisc which gave way to DVDs which are slowly being eroded by Blu-Ray but are being kept afloat because Blu-Ray players mostly play DVDs too.

What do they think is going to happen? I truly believe in ten years, e-books will be the dominant way people read and paperbacks will be the way they are treated in my home right now.

I love to go to author events, I speak to readers, some buy my paperbacks but most look me up on Amazon and one-click it, grab a bookmark and have me sign it. I trade some paperbacks with fellow authors in lieu of money, we autograph each other's books and mine go on a special book shelf at home.

I haven't read a paperback in so long, I wouldn't know what to do with one. I have every generation of Kindle Fire and I have a Samsung tablet. There are a total of 6 laptops, 8 Kindles, 1 tablet and 1 Chromebook in my home.

As for paperbacks...well, I've got a shelf full...from indie authors. The books I read from these same indie authors are on my Kindle. Same goes with my Stephen King colection -- it's ON my Kindle. I collect paperbacks -- I no longer read them.

I'd like to think I am different or high tech or above the curve but I don't think my solidly middle-class family really is for the matter.

McVickers said...

I normally read Joe's blog posts the day they're posted, but it took me a week or so to finally get around to reading this one.

Honestly, I just don't care about Hachette or their fellow slave masters. I'm way too busy trying to figure out what to buy with the $20K-plus earnings that Amazon will be depositing into my bank account this June 30th based on my self-publishing titles...

...titles that I never bothered to query agents or publishers with, and that I have spent a grand total of $200 in a Bookbub ad to advertise since I started self-publishing early this year.

Decisions, decisions...

Christina Pilz said...

Your post explains it better than I ever could - Amazon is not perfect, but at least they are trying to be fair to authors, the "cash cow" of the book publishing industry. Without writers, there would be no books. The industry is changing. Ebooks cost much less than POD - way less. So why charge the same?

Try explaining that to someone who thinks Amazon is evil. Just try.

Peter Inglis said...

A surprising interview with Mark Coker of smashwords here: Amazon: Hachette fight for Publishing Future..

Anonymous said...

I'm hooked on this blog, in severe withdrawal from two weeks of no posts. C'mon man, throw me a bone here! :)

Okay, I guess your busy taking care of business on your next novel. Gotta keep building that pile of cash back up, it goes quick, I know.

I guess I'll have to endure this jonesing torment a little longer. Whew, withdrawal is tough...

Anonymous said...

Joe's going to be eating his words about Amazon very soon.

BBC now reporting on Amazon using bullying tactics against small publishers:

Amazon now want authority to print the books belonging to those publishers themselves!

Nice for authors. Not nice for publishers. And confirms that Amazon are seeking to push publishers right out of the picture where possible.

Try reprinting a book belonging to another publisher. I think they call it copyright theft. Though here done on the basis of "negotiation" ie if you want to deal with Amazon, these are the new rules.

Authors would be advised to seek other platforms for making sales. Because what Amazon do to publishers today, they can do to authors tomorrow.

llamoure said...

It's been two weeks since Joe posted this. If any of his friends are reading this, could you swing by his house and make sure a major publisher hasn't buried a Hachette in his back? Thanks.

Anonymous said...

Having Konrath blog post withdrawal symptoms...