Friday, August 01, 2014

Michael Cader of Publishers Lunch

Joe: Yesterday I fisked Mike Shatkin, who openly brags he doesn't read my blog, and has removed my comments from his blog because he felt them too long.

I also fisked Michael Cader from Publishers Lunch.

Cader, however, showed he doesn't fear debate, and had no problem sharing his opinion in a forum where many have a contrary point of view. He responded to my points in the comment section, and that took integrity and more than a little bit of guts.

Michael Cader: Hi, Joe. I'm glad we have at least some points of agreement. Some of your other replies are tangential rather than on point.

Joe: Thanks for responding, Michael. While it isn't unprecedented for people I blog about to respond, it is certainly unusual, and shows both an open mind and a willingness to engage. You have my respect.

Cader: Amazon is very careful with their words, even if not elegant. The post begins, "A key objective is lower e-book prices." A lot of traditional media have written the post up as if it said "The key objective..." What are the other key objectives, Amazon? Why do your conversations with people in the trade talk about looking for your fare share of the "business efficiencies" produced by a rising ebook market and your investments, while your public words are only about pricing objectives.

Joe: Well, we agree that Amazon is careful with their words. It’s unusual to hear an observation like that leveled as a criticism. Does Cader prefer the Hachette approach, which is to clear English what a chainsaw is to a tree…?

That said, I'm pretty sure Amazon just agreed to a 30% cut of ebooks--that speaks directly to their business efficiencies of the rising ebook market, doesn't it? So they didn't just speak of pricing objectives. But since Hachette hasn't made any statements about pricing, we're left with the belief that this dispute is about ebook pricing, which is why Amazon is addressing that particular point.

Cader again: I was not criticizing Amazon's careful language, I was parsing it. As the post said, a lot of media acted as if Amazon had said ebook pricing is *the* key objective. They chose to say it was one objective, and they have chosen not to discuss any others. As I pointed out, what they say to people in the trade privately is different. So you can have your belief, but it's just that, and not necessarily backed up.

I wish HBG had more to say in public, but I also understand why a supplier is reluctant to iterate the steps of their negotiations with their biggest account in the media. Particularly since public statements across years were used against them by the DOJ, and because they have confidentiality provisions in their Amazon contract.

Joe again: Public statements were indeed used against publishers by the DOJ. So were private correspondences that these collusive publishers told each other to "double-delete".

The reason they were used against these publishers is because these publishers were breaking the law. Is that why they're reticent to speak again? More law-breaking going on?

Here we have a case of Hachette saying nothing. No denying Amazon's claims of dragging their feet. No denying Amazon's claims of wanting to control ebook pricing in order to raise prices. Not even pleading the fifth. The only substantive contribution Hachette has made in this debate is to repeatedly reject Amazon's offers to compensate authors.

I can understand, or at least speculate, why Hachette won't say anything. It's because their position is untenable. If they publicly admit what they're asking for in these negotiations, I believe it will cheese off a lot of their own authors, as well as everyone else.

Cader: Amazon says they have "quantified the price elasticity of e-books from repeated measurements across many titles" in their store. Will they provide that data to publishers? Will they do it for a variety of price points?

Joe: Have publishers released any price-point or sales data? No. We rely on third parties to attain that information, such as BookScan.

Cader again: Publishers do provide sales data to a trade service run initially by Bowker and now run by Nielsen, based on their ebook invoices (so it has a time delay). They are actually not allowed to share or publish the *sales* data provided to them by individual retailers, since it's the IP of the retailers.

BookScan would like to license ebook sales data. Amazon has declined to do so.

The point is Amazon is claiming to have determined a universal public good, based on proprietary information, and wants everyone to simply accept that and accept their terms. And they want readers of the post to simply accept Amazon's conclusion.

Joe again: So you're saying that Hachette can't disclose how many ebooks they've sold via Kindle? I've been disclosing that for years. And while it may violate Amazon's TOS, they have yet to ask me to stop doing it. Nor have they asked www.AuthorEarnings.com to stop, or any of the many other indie authors who post numbers.

I confess not knowing as much about BookScan as I used to, back in the pre-digital days. If memory serves (and I may be entirely wrong here, so correct me if I am), BookScan began by collecting point of sales data from retailers. At first, publishers didn't like this happening. They didn't want anyone to know their actual numbers; not their competitors, and not their authors.

They eventually got on board (probably because they wanted to see what their competitors were doing), and it is news to me that they are now willingly providing Nielsen with their ebook invoices.

Does Nielsen still track via ISBN? If so, they've missed a million books I've self-pubbed, and many more millions that other indie authors have self-pubbed.

But getting back on track to Amazon's claim about the profit difference between $9.99 and $14.99, a few of us indies have known this for several months. Amazon has a beta called KDP Pricing Support that estimates how our unit sales and profits will fluctuate at various price points, and offers suggestions for maximizing those price points.

I experimented with this for several weeks, and their predictions were accurate. I've also spoken with others in the program who have had similar results. AFAIK, this beta has now been opened up to other KDP authors, and we should soon have a pool of information that can corroborate this. But how much corroboration do we need? Amazon's KDP pricing structure has been in place for years; 70% royalties to ebooks priced between $2.99 and $9.99. Higher or lower is 35%. They seem to know their sweet spot.

Cader: Amazon keeps trying to push a public perception that most new ebooks are $14.99, overlooking the substantial number of titles at $11.99 and $12.99 -- and overlooking the post-settlement discounting provisions that led some publishers to raise ebook prices in anticipation of Amazon's discounting.

Joe: I had the impression that Amazon is focusing on $14.99 because that's the price Hachette is pushing for. Remember that the agency model is still in effect on Amazon, all the DOJ did was allow Amazon to discount those agency prices.

As for publishers raising ebook prices in anticipation of Amazon's discounting, I find it hilarious that there were abundant author complaints that Amazon stopped discounting Hachette titles. How about Hachette prices them fairly to begin with, in which case discounting wouldn't be needed?

Cader replies: So the technique has worked. Do some research, Joe. $14.99 was a rare price point following the introduction of agency. (It applied to books with a hardcover price of between $27.51 and $30.) The preponderance of new release agency books were lower -- the stipulated price band maximums are a matter of public record. (There was no $13.99 bracket, I guess for luck. So lower priced hardcover releases had ebooks at $12.99 and $11.99.)

Even now, many new release HBG ebooks are $12.99. Like CALIFORNIA, for one example. Data is available on their web site. Yes, some of their ebook prices probably did rise *post settlement* -- and *because of the settlement.* Once discounting was allowed, at least some agency publishers increased their ebook prices, to balance out the expected discounting within the post settlement limits.

I do agree with you on the discount complaints. You can't have it both ways. Either you want your prices observed, or you allow or even prefer discounting. It is clear that Amazon has used modification of discounts on HBG books as a tactic in the negotiation, but I don't think it is a tactic authors or the publisher ought to be complaining about.

Joe replies: Here are responses from William Ockham and Laura Resnick.

William: Cader makes much of the fact that most titles weren't priced at $14.99. He elides the fact that it is the number of copies sold at that price that matters. It is a fact (you can look it up in the Apple ebook antitrust judgment) that the colluding publishers raised the prices of some print books so that they could get to that $14.99 price. And it is a fact that they wanted even higher prices, but Apple wouldn't go along with that. Trying to give the publishers credit now for the fact that Apple kept them from raising prices as high as they wanted is a bit rich.

Cader certainly chooses his words carefully. He completely distorts what actually happened when the publishers pulled their scam with Apple. There is a factual record available on the internet. You don't have to take my word for any of this. You can look it up for yourself.

Laura: What William just said. It's in the lawsuit.

Apple wants to set a $12.99 ceiling on ebooks; the colluding publishers resisted. Apple needed to close the deal before the launch of the iPad, which date was approaching, so it made a counter-proposal: an ebook could be priced higher, up to a ceiling of $14.99, =if= the print edition was more than $28, which was the typical hardcover SRP at that time. The publishers agreed and signed, and one immediately sent a memo to staff, introduced as evidence in the court case, telling them to start raising print prices above $28.

Cader: Their figures consider a world of ebooks only. Their "total pie" is really just a piece of the pie. But publishers and authors are looking to maximize revenue across all formats. "Total revenue" on an ebook is only part of the "total revenue" for a new release book, and the hardcover edition still generates substantially more revenue per unit.

Joe: As I mentioned while responding to Shatzkin, this dispute is about ebook prices. Hachette is welcome to counter with a "total pie" argument, but Bezos believes "your margin is my opportunity". He's not in business to prop up the paper book market.

Cader again: You are limiting the sphere because it serves your argument, Joe, but that doesn't make it any more true. First, as established above, you are relying on your "belief," when there are good reasons to believe the dispute is broader.

Joe again: I'm not limiting any sphere, Michael. I'm focusing on what Amazon said, not guessing about what other factors are in play.

Cader again: But also, even if ebook prices are the focal point of the dispute, that does not mean HBG should not be looking at the effect across their total business, and their total account base.

Joe again: I'm smiling, because I think we both know what effect HBG is looking at. I've been blogging about it for years. They have a paper oligopoly, and ebooks threaten that.

Cader again: Amazon's statement is rhetoric, posted on their own forum, which is of course their right and prerogative. My point was to illuminate some of the rhetorical devices at play and in what they, and don't, say. You seem to be arguing that we can only discuss their statement within their rhetorical box, which of course leaves little to say and nothing to learn.

Joe again: Careful you don't confuse "learning something but not as much as you'd like to learn" with "nothing to learn".

We've actually learned a lot from Amazon's statements, and Hachette's lack of statements. I'm sure there is much more to this story, but we can guess at what is left unsaid. Keep in mind that I've been blogging about what this was really about--Hachette wanting to control ebook pricing--before Amazon released a single statement.

http://jakonrath.blogspot.com/2014/05/fisking-lilith-saintcrow-and.html
http://jakonrath.blogspot.com/2014/05/turow-patterson-plateful-of-fail-with.html
http://jakonrath.blogspot.com/2014/05/fisking-charlie-stross-more-on.htm

It wasn't too hard to figure out what Hachette's intentions are. And Amazon has corroborated this.

http://jakonrath.blogspot.com/2014/05/amazon-speaks.html
http://jakonrath.blogspot.com/2014/06/konrath-vs-colbert.html
http://jakonrath.blogspot.com/2014/06/i-understand-and-sympathize.html
http://jakonrath.blogspot.com/2014/06/the-hachette-job.html
http://jakonrath.blogspot.com/2014/06/more-konrants.html

And this was before all the current Doug Preston/Authors United nonsense. We've learned a whole lot about what everyone wants.

Cader again: You are correct that Bezos is not in the business of benefiting anyone but Amazon. But that's not what the Books Team post tells consumers/readers. It tries to create the impression that lower ebook prices create more revenue for everyone, full stop, and therefore there is no arguing against it.

Joe again: Lower ebook prices will create more ebook revenue for everyone. That's what the Book Team said, and it's true.

Publishers know that higher ebook revenue comes at the expense of their paper oligopoly. But I don't expect the Big 5 to issue a statement like, "We colluded, and now Hachette is resisting negotiations because we're afraid of being disintermediated."

As I've said, Hachette et al should worry less about losing their cartel over paper distribution, and more about the legacy authors who are waiting for their contracts to end so they can self-publish. Amazon was even helpful enough to tell Hachette that, suggesting they double their author ebook royalties.

Cader again: Publishers and authors are concerned with all revenue, all types of readers, and all accounts as I stated.

Joe again: Well, publishers certainly are. And perhaps authors who have publishing contracts are.

Authors like me, and others who have opted into KDP Select because it is making them more money than all of those other platforms combined, aren't as concerned.

Besides, how am I supposed to care about the brick and mortar bookseller industry when most of them refuse to stock my books, either those I self-pub or those I publish through Amazon's imprints?

Cader again: Growing Amazon's dominant market so that it is bigger still and drives other players out of the business is not what HBG is "in the business" of either. Each party has its own objectives, for sure. But Amazon is the one posting as if they are addressing a mathematical, universal good.

Joe again: It is indeed a mathematical, universal good--for ebooks. Which is what the statement was about, and seems to be the major point of contention in their negotiations with Hachette.

I think we're talking past each other. We both agree that Hachette wants to protect their paper sales.

But, again, why should Amazon care about what Hachette wants to protect?

Let's say I own a store, and you want to supply me with widgets. We can't agree on terms. I explain to you that if you accept my terms, you'll maximize your revenue on widgets. But you also sell thingamabobs. And you need to price widgets high to continue to sell thingamabobs.

Why should I care about your thingamabob problem when we're negotiating over widgets? That's not my problem. You want control over pricing because you're worried you'll lose market share and power and revenue in other aspects of your business. I understand. What you need to understand is that if you want to sell widgets in my store, you have to agree to my terms.

Cader again: Yes, readers will vote with their wallets. HBG wants Amazon to continue let readers have that vote. If they don't like HBG's prices, whatever they might be, they won't buy the books.

Joe again: Now we have the reverse of the point you just made. Amazon wants low ebook prices not only to maximize ebook revenue for themselves (and, as they mentioned, for authors and publishers) but because it helps them increase market share, attract more customers, sell other stuff, etc.

But that's not Hachette's problem, anymore than Hachette's paper sales worries are Amazon's problem. Both companies have long term goals. Those goals may be at odds.

However, this dispute comes down to ebook prices. Everything else may be related. It may be a giant house of cards, and if Hachette (and the other Big 4 who are going to have to do the same dance with Amazon) don't get what they want, they'll collapse.

Well... so what? Why should Amazon care if Hachette flushes itself down the toilet in its efforts to remain relevant? Amazon has 600,000 ebooks in Kindle Unlimited. And if Hachette folds, Amazon will likely carry books by Hachette authors once they're free of their contracts.

Hachette is a middleman. Amazon is not.

Amazon is playing it very smart offering in Hachette authors monetary compensation. It's like scouting an opponent's team for star players. Preston and the Authors Guild understand this. Authors understand this. Hachette understands this, and is losing the PR battle, perhaps not in the biased media, but certainly in the hearts of authors. At least the ones who aren't super-rich or have Stockholm Syndrome.

Preston made a concentrated effort to gin up support for his letter. He found about 900 people, and it took him weeks, and required the help of the media.

We slapped together a petition in a few hours, and within a few days had thousands of authors sign it. Without any concentrated effort. Without informing the media.

I'm pretty sure the Ansel Adams Trust Publishing Rights Trust, as powerful as it may be, is less important to Amazon than the thousands of authors who disagree with Preston. Hachette should be paying attention to this. But according to their latest investor meeting--which took place after this dispute went public--they're more concerned with keeping control over ebook prices while smugly reveling in their position of "sifting" authors.

Cader: But they way they phrase it in the post -- "the 30% share of total revenue is what Hachette forced us to take in 2010 when they illegally colluded with their competitors to raise e-book prices. We had no problem with the 30% -- we did have a big problem with the price increases" -- is factually wrong. eBook prices paid by consumers may indeed have risen post agency, but the agency publishers themselves did not increase prices. They lowered their prices to their retailers, and they eliminated discounting.

Joe: Huh?

Ebook prices paid by consumers went up. The publishers controlled those prices. And publishers and authors made less money. But this is all apparently okay as long as Amazon could no longer do any discounting?

Amazon has no problem with 30%, because that's what they take from indies. They did have a problem with higher ebook prices.

In the short run, Amazon made more money per ebook sale when the publishers forced the agency model on them, and they still had a problem with it because it meant higher ebook prices overall, which they didn't want.

Cader again: I chose my words very carefully here, Joe, just as Amazon does. They don't talk about "ebook prices paid by consumers."

The ebook prices publishers charged to Amazon went down as a result of agency. That it is a clear, indisputable matter of fact.

For a $27 hardcover, agency publishers typically would have called the consumer MSRP anywhere between $27 and $21.60 (20 percent less). Amazon would have paid about half of that to the publisher ($13.50 to $10.80). That same ebook would have been agency priced at $12.99, and Amazon would have paid $9.10 to the publisher. The price between the publisher and Amazon decreased.

Joe again: Who cares if the ebook prices offered to Amazon went down? Amazon didn't want higher profit margins. They wanted lower ebook prices. Publishers weren't doing Amazon a favor. Publishers were guarding their own interests, while also earning less for themselves and their authors. And they colluded to do so. That's how frightened they are of losing their cartel.

Cader again: Consumer prices are a separate issue. Higher prices to consumers may have been the result on some books, but it was not because publishers raised their prices. Publishers lowered their prices, but eliminated discounting.

Joe again: Let's make it nice and clear for those in the cheap seats.

Consumers paid higher prices. Publishers were the cause.

You're conflating a separate issue here. Intentions don't ameliorate consequences.

Cader again: As for the myth of $9.99 and what Amazon "wants," did you see the document that surfaced during the proceedings showing Amazon's formula for when and how long they would discount to $9.99 and when they would let the ebook price rise again?

On the other hand, some publishers did raise their ebook prices *post-settlement,* to make room for the limited discounting allowed.

Joe again: Can you link to the document? I'm not following the argument here.

Cader: Smashwords founder Mark Coker wonders in our comments why that offer doesn't apply to the hundreds of thousands of Smashwords titles? "So agency is okay as long as it's accompanied by lower prices? Then why have they refused to allow Smashwords or other low-cost ebook distributors into their agency program?

Joe: I'll take a wild shot here: because Smashwords is a competitor?

Cader again: Yes, Smashwords is in some ways a competitor -- and there are many instances in which I will not quote Mark for that reason -- but shouldn't Amazon want them to be a supplier? Why does it matter if they get 30 percent from a KDP author, or 30 percent from a Smashwords author?

Joe again: Amazon could, indeed, treat Smashwords like it treats Hachette. They choose not to. They're allowed to make that choice. I can think of several reasons why, other than competition. Amazon prefers to deal with authors directly, because it pays authors more, and they want to lure more authors into exclusivity with KDP Select. Smashwords not only sells ebooks on their own platform, but they distribute to other sites. It isn't in Amazon's best interest to have ebooks available on other sites, which is why they offer so many KDP Select perks. And Coker is a rabble rouser intent of causing trouble and eventually wants to take over the world.

Cader again: Amazon is positioning themselves as speaking for and acting for all authors interests', particularly those of self-published authors. You and Barry have declared them the real Authors Guild. But here you are excusing the way they treat a couple hundred thousand independent Smashwords authors/publishers because of competitive interests.

So maybe you should sort that position out further.

Joe again: I'm kidding about Coker. I think he's one of the heroes in this revolution. I met Mark a few years ago, and we've traded emails and phone calls.

I'm starting two ebook businesses. Amazon may not want Mark and the Smashwords catalog, but I do. I'll take the whole thing, and I'm hoping we'll be able to work something out.

Cader again: Also, Amazon is still supposed to be a store, that sells books by other suppliers. The Kindle mission is "any book, ever published, in 60 seconds or less...," not "any book, published by us, subject to our broad rights claims and ability to change terms without any notice or consent...."

Joe again: I agree. Amazon is leaving some scraps on the table, and these scraps are worth millions. Watch www.ebooksareforever.com and www.bookloco.com. I'm going to pick up the scraps that Amazon doesn't want, and do so without competing with Amazon.

Publishers are correct to fear Amazon. Amazon is slowly disintermediating them. That's what this dispute is about.

Cader again: Yes, that. Hachette is trying to prevent that, and protect their business, their authors, and their other vendors. As you have implied in your comments, Amazon is also looking to disintermediate other retailers, and other suppliers/vendors/distributors like Smashwords.

Joe again: But there is one entity Amazon cannot disintermediate. The author.

Right now, authors are suffering. But we've actually been suffering for decades. I used to be a Hachette author. I found a way out of my contract. And I'm thrilled I was able to, because I'm making 10X as much money as I was through Hachette. If I was still bound to that contract, watching my income slip away, I'd be going out of my mind right now.

But I wouldn't be blaming Amazon. I'd be blaming the company I signed the contract with. The one who has the responsibility to get me into stores and is failing. The one who has rejected three Amazon offers to help me. I'd be mad as hell.

But I got out, because I suspected this was going to happen. This and a lot more. Give it a few more years when things really start getting crazy.

To Hachette authors: hire a lawyer specializing in publishing. Try to get your rights back. Or do what Courtney Milan did and release interactive multimedia versions of your books.

You're getting hurt right now because Hachette is negotiating for things it doesn't want to admit to in public. You trusted them to do what was best for your book, and they're botching it. Get your books back.

Amazon isn't your friend. They're a business, just like Hachette. But at this moment in time, Amazon's agenda aligns with yours. Their enlightened self-interest is helping authors.

You won't hear this from Publishers Lunch because it is Publishers Lunch is paid for by publishers, and when publishers start toppling, there goes PL's subscriptions.

I don't get paid for this blog. I have no horse in this race. I'm just an activist, a populist, trying to help authors make informed choices by reacting to the misinformation being spread by the media. I don't want your money. I don't hide behind a paywall. This is my public service to you.

Big props to Michael Cader for joining this discussion for free, and I expect any questions directed toward him in the comments to be polite. I will censor rudeness. We have a guest who has a different perspective which we can all learn from. Be nice, or I'll boot you.

Michael, I hope you stick around and address the comments that will pile up. I also hope you offer a response to Barry's post on anonymity.

Barry uses examples and links to many sources to support his position, but, here's his main argument.

Barry: Though I’m encouraged that Michael seems to at least be aware of my criticism, I’m concerned that he doesn’t understand it, because he seems to be conflating anonymity in an article with closed comments to an article. Both practices are problematic, but they’re not at all the same thing.

Let me start by trying to find some common ground here: I generally agree with Michael (and with top literary agent Ted Weinstein) that Amazon should have enabled comments on its post. Though I think there’s a bit of a difference between what one might reasonably expect from a corporation, on the one hand, and what one might expect from an organization calling itself the “Authors Guild,” which bills itself as “the nation’s leading advocate for writer’s interests in effective copyright protection, fair contracts, and free expression” (my emphasis, because I love irony), on the other, let’s not quibble. Let’s just agree that whether it’s the “Authors Guild;” or Amazon; or James Patterson, Douglas Preston, Richard Russo, or Scott Turow, the failure to engage substantive critiques of your arguments (yes, that’s you, Douglas Preston of “Authors United”) is a disservice to the public and belies a lack of confidence in one’s own positions.

Which, I have to emphasize, is why I’ve been so disappointed in the failure of Publisher’s Lunch to respond to my critiques of their pernicious habit of granting publishing executives anonymity. Michael, you’ve clearly read the critiques; is a misfired jab in response really all you think you owe your readers?

All that said, to equate granting anonymity for sources quoted in a news publication, on the one hand, with a blog post closed to comments, on the other, is incoherent. Let’s talk about why.

Amazon’s post was issued on behalf of the corporation. It’s signed, “The Amazon Books Team.” Michael, if there’s some way you think the post would have been more transparent or more accountable if it had instead been signed, “Jane Doe, on behalf of Amazon,” I’d be grateful if you could elaborate. But either way, we would know the statement was made on behalf of Amazon and that Amazon stands behind it.

By contrast, the Publisher’s Lunch anonymous quotes I’ve addressed have been about (i) speculation regarding the basis for an author’s business decisions; and (ii) refuting Amazon’s on-the-record assertions about how Hachette has dragged its feet in negotiations. In this context, is there any question that transparency and accountability would be improved if the executives making these assertions allowed the use of their names?

Or to put it another way, why won’t they use their names? If Amazon is lying when it lays out the factual history of Hachette’s foot-dragging, wouldn’t a Hachette executive—wouldn’t the entirety of Hachette management!—want to go on the record to rebut? Of course they would.

And that being the case, why doesn’t Publisher’s Lunch, in the interest of transparency, accountability, and accuracy, insist that any such official it quotes go on the record?

Look, if I publish my own blog post without enabling comments, I’m being small-minded and cowardly. But if I publish someone else’s comments without attaching his or her name to those comments, I’m potentially enabling score-settling, propaganda, and straight-up lying in the pages of my own publication.

So when the White House publishes bullshit on its own website, we know where the bullshit is coming from, even if we can’t directly respond. But when the New York Times publishes that same bullshit—attributed to “Senior Administration Officials”—we don’t know who to hold accountable. The official seems to be speaking on behalf of the government, but maybe she’s not. We can’t question her assertions or otherwise hold her to account because we don’t know who she is. We don’t even know if she’s speaking on behalf of the government, some faction of the government, or herself alone. It’s all deniable—with the newspaper’s complicity.

Michael, in the end, maybe we won’t be able to agree on any of this. But even if your point that “Hey, Amazon does it, too!” were correct, would that absolve you when you fall short of your own journalistic benchmarks? Shouldn’t you set your own standards based on your own integrity and on what’s best for your readers, and without regard to what Amazon or anyone else does or doesn’t do in their own blog posts?

In the spirit of transparency, accountability, and engagement that (I think) we both agree on, I hope to hear from you in the comments. Mine are always open. :)

Joe: As an addendum to what Barry said about why it is pointless, pernicious, and promiscuous, you obviously talk to a lot of sources high up at publishing houses. Since we've seen, through the DOJ suit, how these people lie, deny, and actively attempt to cover up, have you considered that you're being used, manipulated, and deliberately misled? That's what they have a documented history of doing, whereas Amazon does not.

When Amazon says something, they're automatically suspect. But you believe it's okay to quote an anonymous publishing source, when anonymity isn't required.

It's more than just a question of accountability, or journalistic ethics. They could be playing you, Michael. And they haven't shown themselves to be smart enough to get away with that. Add in people like me, and Barry, and Hugh, and David Gaughran, and David Vangergriff, who are paying close attention to this situation, and you might find yourself in a sticky predicament of having to defend outright bullshit because you chose to anonymously cite it.

Or, even worse, what stops any of your critics from accusing you of fabricating the quote? Obviously Amazon didn't fake its own press release. We know where it came from. But if you keep citing anonymous sources, it really puts a big question mark over your veracity.

"A Big 5 editor, who asked not to be named, confirmed that every new publishing contract will contain a 'Love Room' clause, where once a month the author will be taken into a room and repeatedly sodomized. This will continue for the life of the author, plus 70 years."

See? I can make up anything I want to, and without citation, I can use it to further my own agenda without being forced to defend it. That really is pernicious.

Barry Eisler is currently on the road, but he also wanted to weigh in on your responses. Rather than take them line by line, Barry has focused on three main areas of disagreement. Though he brings up many of the same points I did (we didn't read each other's comments), he also brings up some I missed.

So here's Barry…

Barry: Michael, thanks for weighing in here. One of the primary characteristics of any establishment is an unwillingness to acknowledge the legitimacy of critics of the system (which manifests itself, among other ways, in a refusal to respond to criticism itself). That tendency is unfortunate because it prevents systems from improving (in fairness, improving a system, rather than preserving it, isn’t what establishments are typically about). Anyway, kudos for being better than that, and for demonstrating thereby that you care about improving the current system of publishing more than you do about preserving it.

I’ve read all your comments, and I think we have three broad areas of contention. Here are my thoughts on each.

First, I think we agree that Hachette (and all legacy publishers) are heavily invested in preserving the position of paper. Where we differ, I think, is on whether this focus is ultimately beneficial for the publishers in question and, more importantly, beneficial for books and reading.

But as long as we agree on the first part, I’m happy. My primary aim is to make writers aware that when publishers like Hachette are pricing books high, it’s not being done with the primary objective of maximizing revenue. Rather, the primary objective is to protect the position of paper. As long as authors understand this, they can make informed decisions.

In this regard, it’s perfectly legitimate to observe the opposite: that Amazon, which has as a strategic objective the growth of digital, might be pricing its books below the sweet spot, leaving money on the table as a way of growing the digital market. My own sense is that, while this might have been true in the early days of the digital books ecosystem, it isn’t any longer. Amazon doesn’t seem to pump-prime markets for longer than they think they need to (for example, the recent price increase of Amazon Prime), and my sense is that Amazon understands the digital market has achieved a self-sustaining altitude and now they can ease back on the throttle.

Beyond that, (i) I’m making far more money from my ebooks priced in the $2.99 to $7.99 range than I ever did when they were at the legacy-set price of $12.99; (ii) I know scores of other authors whose experience has been the same; and (iii) there’s lots more data on the way from Author Earnings indicating that significantly more revenue is generated at lower price points.

Second point of contention: that Amazon is somehow being deceptive in comparing only $9.99 and $14.99, and that the real sweet spot price is somewhere in between. Based on the experience and data I mention above, I don’t believe this is the case. But again, the main thing for me is that this conversation is happening and that our respective views are being aired and engaged, so authors can make better informed decisions.

Third, on pricing I think we’re talking past each other. I don’t particularly care what wholesale formulas are used to derive retail prices. The point I, and Joe, and others have been making is that legacy publishers want a higher retail price point for ebooks and that Amazon wants a lower one. If you’re arguing that the purpose and the effect of the Big Five’s collusion with Apple was other than to achieve a higher retail price point, then it’s probably time for us to just respectively disagree and move on. I’m happy to let the facts, and the DOJ price-fixing case and consent decree, speak for themselves.

Again, kudos for showing up here and engaging your critics, and I hope your example will prove contagious within establishment publishing generally. If it does, everyone stands to benefit. Along those lines, I’d love to hear your thoughts in response to my post Publishers Lunch and Pernicious Anonymity -- it was addressed to you, and so far you’ve ignored it, which seems like a lost opportunity. But even if you prefer not to engage my arguments there (or here), I hope you’ll at least consider them. Publishers Lunch is an important and valuable source of information and insight, and I think you’d be even better if you insisted that, with rare exceptions, your sources go on the record rather than hiding behind unaccountable anonymity.

Joe: Michael, You're welcome to respond again in the comments, or you can send me an email and I'll add your comments directly to this blog post.

I also hope that other industry pundits reading this consider the tone Barry and I have used. I've purposely been rude and confrontational in an effort to shame people like Turow, Patterson, Preston, Russo, Robinson, Shatzkin, et al into responding. For years, my polite appeals to debate have been ignored. So I've grown increasingly frustrated, and snarky, when dealing with soapbox tape-recorded megaphones spouting the same nonsense over and over without acknowledging or engaging opposing viewpoints.

But when someone does engage, like you, or Steve Zacharius, I take extra efforts to make sure I am as polite and considerate as my guest is.

That also goes for the comments. Once again I'll warn my commenters to attack the facts, not the person. If we can all be civil and play nicely, we all have the chance to learn. I will moderate people who step out of line, so err to the side of polite.

Addendum: Michael Cader responds

Cader: As you say, some of this is getting circular, so I'll try to keep this reply briefer, and focus on places where I might have something new to add, rather than repeating what I said before in a different way. (Also, together we've shed thousands of words over Amazon's 600-word statement, and I'm trying to get out of town.)

Fundamentally, I think we are agreeing -- though stating in somewhat different fashion -- that both Amazon and Hachette are looking to protect/advance their own interests.

Joe: Yes. But there is self-interest that hurts authors, and enlightened self-interest that benefits authors. I think Barry and I have presented a good case showing which is which.

Cader: Hachette did deny Amazon's claims of dragging their feet, albeit in a fashion Barry did not like -- but the denial was issued nonetheless.

Joe: Not to go circular, but the denial was issued by whom? Was it on the HBG website? Via a Press Release? In an email to authors, by CEO Michael Pietsch? Was it done through any official source, or by anyone who could be held accountable?

Cader: I wish they would say more, but it's not at all unusual for a company to decline to negotiate with a key supplier in public. It's probably the norm. What's more unusual is Amazon's multi-pronged, multi-message approach -- sometimes negotiating with people who are not authorized to make deals, sometimes eliciting feedback from publishing community members and then ignoring that feedback, sometimes via these statements on their forum, like Clint Eastwood at the Republican convention. You see it as noble and clear; others see it as desperate and flailing. There's some dignity in HBG not letting Amazon set the public terms of engagement.

Joe: Michael Pietsch is the one who set the public terms, when he sent out letters to Hachette authors whining about Amazon not stocking titles and removing pre-order buttons, but negelecting to mention Hachette ignored Amazon's continued attempts to negotiate.

Hachette currently has no contract with Amazon. Staying silent isn't dignified. The word I'd use is "shitty."

Cader: Yes, Hachette cannot disclose how many ebooks they've sold via Kindle on a per unit basis. (They have disclosed, both to the court and their public investors, Kindle's share of their ebook sales.) The jeopardy that attaches to a big company for such a violation is different than the jeopardy to you as an individual.

Joe: Fair enough. So why demand more figures from Amazon?

Cader: I agree that publishers have been uncomfortable with all kinds of transparency (including our PM deal reports). But Bookscan would not exist if publishers did not pay fees to keep it going.

Joe: That's not the same thing as saying they freely give Boocan information. Which, if they did, would go against your previous statement about being unable to disclose how many ebooks they've sold via Kindle

So do publishers share info with Bookscan? Or does Bookscan find it by tracking UPC codes and ISBN numbers?

Cader: Your new businesses sound interesting, and savvy. The ebook world is still full of possibilities and room for growth. And at least some consumers are clearly uncomfortable with the idea of having only one reliable, viable place to buy their ebooks. I'll look forward to hearing more.

Joe: We're in beta, and should be rolling out an enhanced beta in about 8 weeks.

Cader: I'd rather not launch into a long debate on paper versus digital. Yes, big publishers have distinct, leveragable market advantages in the physical supply chain. They may indeed want to "protect" that.
But they are also servicing readers and I don't think we should lose sight of that. In the latest survey from a non-publishing-related polling entity, Pew, only 4 percent of respondents are reading e-only, and a substantial percentage don't read digitally at all yet and don't want to. And for mainstream publishers, 75 percent of dollars (or more) are spent on print.

Joe: Servicing readers? ;)

Is making readers wait a year for the cheaper paperback version actually serving readers? Is DRM servicing readers? Was windowing servicing readers? Are $14.99 ebooks servicing readers?

I make my books available in paper, for readers who prefer it. I consider that servicing readers.

Controlling what gets published, and what gets onto bookstore shelves, and the prices readers will pay, is not what I'd call servicing readers. I'd call it charging whatever you want to because you control supply, i.e. a cartel.

Cader: Again, it's a very long, separate conversation about when and how to trust sources and when not to. I am careful and circumspect; I know (and am told) a lot more than I report, and am always looking to have an understanding of the broader context; and as you've noted, I do have access and interaction with people all across the publishing world (including retailers, authors and agents). And they all know where to find me if we run something this isn't correct or doesn't sound right.

I have been on this beat every day for over 14 years. Like anyone I've made my share of mistakes but I'll stand my record against that of anyone who has covered the trade publishing business.

Joe: And we can enter all of that into the public record. I'm sure you're a reputable, stand-up guy.

That doesn't excuse using anonymous sources in the context with which you used them. Especially when they furthered a specific agenda that I've shown to be disingenuous.

Cader: Since you have gone to admirable lengths to conduct a respectful dialogue here, I would like to take issue with this:

"You won't hear this from Publishers Lunch because it is Publishers Lunch is paid for by publishers, and when publishers start toppling, there goes PL's subscriptions. I don't get paid for this blog. I have no horse in this race."

The notion that you, or Barry, or Hugh -- or Shatzkin, or me, are truly writing in defense of personal economic interests is illusory, and offensive. I don't think an exchange among people who are likely to disagree will ever get very far if we lean back on an implication that the other guy is really in the tank for personal gain.

Joe: Michael, I write thrillers about cops. There's a reason cops talk about motive. Someone with something to gain is likelier to commit a crime than someone who doesn't.

We can agree that both Amazon and Hachette have distinct and different motives for their actions, above and beyond what they've stated.

You might be offended that I would consider someone paid by the industry as sympathetic to the industry. I consider it entirely plausible and rational. When I pick apart your arguments, or take you to task for citing anonymous sources, of course I see bias there.

We all have bias. But my bias in this debate isn't currently connected to a revenue stream. You may believe that bringing that up is illusory, and I respectfully disagree. I think motive should be considered, as it is in any court of law.

Cader: (You said you're starting businesses to help sell ebooks by other self-published authors; I say good for you, rather than focusing on how that might give you a horse in the race....)

Joe: Once those businesses are up and running, I will definitely have a horse in that race, and a much greater need to protect my self-interest. But, again, it is enlightened self-interest. EbooksAreForever is starting with 70% author royalties, and we're hoping to go higher from there. BookLoco will have days where authors make 100% royalties.

Full disclosure: I don't want to run a business, let alone two. I'd prefer just to write books. But I've been pretty good at predicting the future of publishing, and I see some areas that aren't being attended to by any current business model. Libraries are getting screwed. Authors and readers who want free ebooks aren't being properly catered to.

So I could ignore what I believe the future holds, and continue to rely on companies who hopefully will keep my best interests in mind. Or I can do something that will give authors another revenue stream, libraries a fair shake, and readers more choices.

Once upon a time I relied on a company to have my best interests in mind. That company was Hachette. They did not have my best interests in mind, and this current debacle shows me how right I was to leave them.

I hope to make some money in these new ventures. But most of all, I hope to give opportunities to readers, writers, and libraries that they currently don't have.

Cader: We've all been fortunate in our work; we're all engaging passionately in precious free time in ways that none of us has to because we think it's important and valuable to a community we all care about and want to see endure and succeed. Even if we have different ideas about what that future path might look like, or ought to be.

The idea that Publishers Lunch serves only publishers and is supported only by publishers is incorrect. PL and PM have welcomed and served all publishing professionals since inception, and from the beginning we included authors -- both published and aspiring -- in that definition and that community. Authors are a substantial portion of both paid and free subscriptions. (As are agents, retailers, digital startups, international publishers, film and tv people, media, and more.) The transparency and accessibility we have helped bring to information about deal transactions, dealmakers and how to contact them have had a radical effect on how the business works, and how those outside a very limited circle can use the same resources and information that editors, agents, publishers and others use all the time to get business done. And through that, among other things, we have helped create substantial opportunities, and revenues, for authors.

I don't want to turn this into an infomercial, but I wish we all could not rely on facile ideas about what is motivating a dissenting voice.

Joe: When my start-ups kick into gear, and you see me being unethical, disingenuous, hypocritical, or motivated solely by greed, I hope you take me to task for it, because someone should call me on it.

And when you quote another anonymous publishing executive, I'll take you to task.

I don't see the publishing industry existing in its current form for many more years. Once B&N goes away, and with it the paper midlist, we'll see layoffs and mergers and bankruptcies and lawsuits and a lot of hurt, confused, disillusioned authors. Many will feel blindsided, when the signs have been there for years.

If Publishers Lunch is able to weather this upcoming storm, and provide information that the survivors are willing to pay for, I'll be surprised, but I'll also admit I was wrong to pigeonhole PL in such a myopic, bigoted way.

See you on the intertubes, and thanks again for stopping by.

Addendum Deux: Barry replies

Barry: By odd coincidence, today President Obama acknowledged that the CIA “tortured some folks” (yes, folks. He called the CIA people folks, too. Just folks, who torture folks). Contrary to treaty and federal law, no one will be investigated or prosecuted. But don’t worry, because "We have to as a country take responsibility for that so hopefully we don’t do it again in the future.”

http://www.theguardian.com/world/2014/aug/01/obama-cia-torture-some-folks-brennan-spying

You might wonder how there can be any taking of responsibility for breaking the law if the law goes unenforced. Which brings me to Michael’s thoughts on anonymous sources in journalism…

Amazon executives claim on the record that Hachette has been dragging its feet, and lay out a whole timeline for the foot-dragging (see William Ockham’s reconstruction at the link below). An unknown Hachette official, who requested anonymity and was granted it by Publisher’s Lunch, then denies Amazon’s claim.

http://jakonrath.blogspot.com/2014/07/amazon-hachette-sounds-of-silence-guest.html

Imagine you’re a child, and terribly unsophisticated about the worlds of journalism, business, and publishing. Might you ask… “Why won’t Hachette deny this in public? Don’t they want people to know the truth?”

The child would know why, too. Because: the Hachette official was lying. But failing to understand something even a child would recognize, Publisher’s Lunch granted that executive anonymity rather than saying, "Sorry, if you want to correct that timeline, you’ll have to do so on the record, just as Amazon did.”

Instead, knowingly or not, Publisher’s Lunch allowed itself to be used to launder corporate bullshit into what looks on the surface like journalism.

And Michael’s response to being criticized for this is, "Hachette did deny Amazon's claims of dragging their feet, albeit in a fashion Barry did not like -- but the denial was issued nonetheless.”

Wow.

The fact that you would believe — and claim in public — that “Hachette” is responsible and accountable for something uttered by some presumptive executive who wouldn’t even agree to have his name attached to the statement is breathtaking. Do you also believe that when some anonymous administration official is quoted in the newspaper, that’s the same as the White House issuing a public statement?

As I explained in my post to you on this topic, good journalism isn’t about what some other corporation does or doesn’t do in its own press releases. And it’s not about what someone like me “likes” or doesn’t like. It’s about what’s more likely to result in accuracy, transparency, and accountability… and what’s more likely to result in distortions, falsehoods, and propaganda. You really ought to read it — for the links to informed thinking on this topic if for nothing else.

http://barryeisler.blogspot.com/2014/07/publishers-lunch-and-pernicious.html

Michael, there are times when the sensible and dignified thing to say is just, “Those are good points. Thanks for bringing them up — I’ll consider them.” Instead of digging a deeper hole for yourself.

Ponder whether this is one of those times.

But however or even whether you want to respond, again I hope you’ll reconsider your practices on granting anonymity to people who have no legitimate reason to ask for it. Why not correct mistakes? Why not try to be better?

Peace.

31 comments:

Nirmala (free spiritual ebooks) said...

Data Guy posted some great charts on Hugh's site that provide further support for Amazon's basic contention that lower prices increase overall revenues. Compare the overall revenue for $9.99 to $14.99, and for even more contrast, compare the overall revenue at $4.99 to $14.99:

http://authorearnings.com/wp-content/uploads/2014/07/daily-unit-sales-by-price-point.png

http://authorearnings.com/wp-content/uploads/2014/07/daily-dollar-sales-by-price-point.png

Nirmala said...

Quoting data guy to show what he was comparing:

"Here’s what the authorearnings.com data from July can tell us about comparative sales at different Kindle ebook price points. Taking the Top 500 Best Sellers at each price point and eliminating the top 10 from each, we see:

$9.99 ebooks outsell $14.99 ebooks by a huge margin in units.

$9.99 ebooks outsell $14.99 ebooks by a huge DOLLAR margin, too, despite their lower price.

Even when looking only at the Top 10 (outliers) for each price point, the pricing sweet spot at $9.99 or above seems to be $10.99 (with $9.99 running a close second).

The Top 10 bestselling ebooks at $12.99 and $14.99 generate fewer gross DOLLARS (as well as selling fewer units) than the Top 10 at $9.99 and $10.99.

But… $4.99 beats $9.99 across the board. $4.99 sells more units AND brings in more gross DOLLARS than any other price point. This is true even for the Top 10 Best Selling outliers at each price point.

Once again, we see that lower ebook prices = higher author earnings.

The Top 500 Best Selling Kindle books priced at $4.99 are out-earning those at $9.99, $10.99, $12.99, $14.99, and every other price point.

(Below the Top 10, $3.99 runs a close second to $4.99.)"

I would emphasize that his data is comparing the top 500 books at each price point (not just the top 500 books overall). So he is comparing 500 books at 4.99 to 500 books at 9.99 to 500 books at 14.99.

Ted Weinstein said...

There's an interesting response from Farhad Manjoo at the NY Times to Amazon's push for lower ebook prices:

"Amazon Wants Cheaper Ebooks. But Should It Get to Enforce Prices?"
http://bits.blogs.nytimes.com/2014/08/01/amazon-wants-cheaper-ebooks-but-should-it-get-to-enforce-prices

Nirmala (free spiritual ebooks) said...

If you really look at DataGuy's charts, it makes you wonder if Amazon should ask for $4.99 pricing. The 500 books at $4.99 sold over twenty times as many copies on average as the 500 books at $14.99, and also made over 7 times as much.

Compared to $9.99, books at $4.99 sold 3 times as many and made over 1.5 times as much revenue.

w.adam mandelbaum said...

There will be a place for paper in the future where digital is, at least for now,inappropriate...IMHO. For example, oversized heavily illustrated "coffee table" books. Deluxe limited run special editions,perhaps. However, for street level fic and nonfic, there are going to be some mighty happy trees out there. The digital finger having writ, and all of that sort of thing. The Hatshit-Amazon battle is a sign of the end times for the normal biz of trad publishing.

shugyosha said...

I find it fascinating and somehow troubling that an industry seems to be unable to understand that lower prices mean more sales.

Unless I'm wide off, they're saying: it's the same money over more books.

No. When something stops being a luxury it's not "the same money". The ones who were buying do keep spending the same money, but you just opened your gates to people who couldn't afford that. You total market widens.

Is it so hard or am I so off?

Take care.

Alexander Mori said...

w.adam mandelbaum - I'm pretty sure there's a coffee table company out there inventing a table with a built in screen so that homes can program different Coffee Table slideshows to replace the cumbersome and expensive coffee table book. Or maybe, a table with a holographic projector that cycles through images from your favorite coffee table books.

And if there isn't, there should be!

Angry_Games said...

So... I stopped reading halfway through because I had to go register at ebooksareforever.com and check out the booksloco thing.

(PS some authors are stupid, aka: me, because I didn't read the instructions thoroughly the first time, so sent an email to have you guys delete one account and keep the other with my real name).

That being said, and I truly hope Joe can make whatever he's up to successful, as in turn, it will be another set of excellent tools for authors like me, I don't think Cader understands, anymore than Marion Gropen over in the TPV comments, what this is really about.

OR

He does, but he's like the rest of the elitist authors who see midlist and self-pub as threats, and they don't want to share their candy with us. So he'll conflate issues to the point where he thinks he can confuse intelligent persons, and walk away feeling like he's won some internet argument.

Meanwhile, Rome still burns, and Hachette is still losing the PR battle.

The last point I'll make is that I find it nearly impossible to listen to the ridiculous nonsense from industry shills and execs after they were found guilty of breaking the law. If you think you aren't guilty just because you settled, you apparently have no clue that the entire trial transcripts are available for us to peruse, and within it, we found OVERWHELMING EVIDENCE OF YOUR GUILT.

A liar saying he's not lying is a liar. Unless he can prove he's not lying.

To this point, I've not heard anyone disprove any of the lies.

Cader said...

[Part 1]
Joe:
Most importantly, thanks for the extra efforts to provide a respectful welcome and civil engagement. It is appreciated, and it does provide a better environment for exchanging contrary views.

As you say, some of this is getting circular, so I'll try to keep this reply briefer, and focus on places where I might have something new to add, rather than repeating what I said before in a different way. (Also, together we've shed thousands of words over Amazon's 600-word statement, and I'm trying to get out of town.)

Fundamentally, I think we are agreeing -- though stating in somewhat different fashion -- that both Amazon and Hachette are looking to protect/advance their own interests.



* Hachette did deny Amazon's claims of dragging their feet, albeit in a fashion Barry did not like -- but the denial was issued nonetheless.

I wish they would say more, but it's not at all unusual for a company to decline to negotiate with a key supplier in public. It's probably the norm. What's more unusual is Amazon's multi-pronged, multi-message approach -- sometimes negotiating with people who are not authorized to make deals, sometimes eliciting feedback from publishing community members and then ignoring that feedback, sometimes via these statements on their forum, like Clint Eastwood at the Republican convention. You see it as noble and clear; others see it as desparate and flailing.

There's some dignity in HBG not letting Amazon set the public terms of engagement.


* Yes, Hachette cannot disclose how many ebooks they've sold via Kindle on a per unit basis. (They have disclosed, both to the court and their public investors, Kindle's share of their ebook sales.) The jeopardy that attaches to a big company for such a violation is different than the jeopardy to you as an individual.

I agree that publishers have been uncomfortable with all kinds of transparency (including our PM deal reports). But Bookscan would not exist if publishers did not pay fees to keep it going.


* Your new businesses sound interesting, and savvy. The ebook world is still full of possibilities and room for growth. And at least some consumers are clearly uncomfortable with the idea of having only one reliable, viable place to buy their ebooks. I'll look forward to hearing more.


* I'd rather not launch into a long debate on paper versus digital. Yes, big publishers have distinct, leveragable market advantages in the physical supply chain. They may indeed want to "protect" that.

But they are also servicing readers and I don't think we should lose sight of that. In the latest survey from a non-publishing-related polling entity, Pew, only 4 percent of respondents are reading e-only, and a substantial percentage don't read digitally at all yet and don't want to. And for mainstream publishers, 75 percent of dollars (or more) are spent on print.

Continued....

Cader said...

[Part 2]

* Again, it's a very long, separate conversation about when and how to trust sources and when not to. I am careful and circumspect; I know (and am told) a lot more than I report, and am always looking to have an understanding of the broader context; and as you've noted, I do have access and interaction with people all across the publishing world (including retailers, authors and agents). And they all know where to find me if we run something this isn't correct or doesn't sound right.

I have been on this beat every day for over 14 years. Like anyone I've made my share of mistakes but I'll stand my record against that of anyone who has covered the trade publishing business.


* Since you have gone to admirable lengths to conduct a respectful dialogue here, I would like to take issue with this:


"You won't hear this from Publishers Lunch because it is Publishers Lunch is paid for by publishers, and when publishers start toppling, there goes PL's subscriptions. I don't get paid for this blog. I have no horse in this race."


The notion that you, or Barry, or Hugh -- or Shatzkin, or me, are truly writing in defense of personal economic interests is illusory, and offensive. I don't think an exchange among people who are likely to disagree will ever get very far if we lean back on an implication that the other guy is really in the tank for personal gain. (You said you're starting businesses to help sell ebooks by other self-published authors; I say good for you, rather than focusing on how that might give you a horse in the race....)

We've all been fortunate in our work; we're all engaging passionately in precious free time in ways that none of us has to because we think it's important and valuable to a community we all care about and want to see endure and succeed. Even if we have different ideas about what that future path might look like, or ought to be.

The idea that Publishers Lunch serves only publishers and is supported only by publishers is incorrect. PL and PM have welcomed and served all publishing professionals since inception, and from the beginning we included authors -- both published and aspiring -- in that definition and that community. Authors are a substantial portion of both paid and free subscriptions. (As are agents, retailers, digital startups, international publishers, film and tv people, media, and more.) The transparency and accessibility we have helped bring to information about deal transactions, dealmakers and how to contact them have had a radical effect on how the business works, and how those outside a very limited circle can use the same resources and information that editors, agents, publishers and others use all the time to get business done. And through that, among other things, we have helped create substantial opportunities, and revenues, for authors.

I don't want to turn this into an infomercial, but I wish we all could not rely on facile ideas about what is motivating a dissenting voice.

Anonymous said...

TL;DR

Will continue to sell books on Amazon and make 5-figures a month. Everyone else can shove it.

Thank you, Amazon.

Pete Pescatore said...

From the peanut gallery: I keep thinking that some of this stuff from "Authors Guild" & "Authors United" and Preston and Patterson sounds vaguely familiar. Where have we heard this sort of thing before?

"There is plenty of that kind of social and emotional hypocrisy around today. Add to it a liberal dose of intellectual pretentiousness and you get the tone of the book page in your daily paper and the earnest and fatuous atmosphere breathed by discussion groups in little clubs. These are the people who make best sellers, which are promotional jobs based on a sort of indirect snob appeal, carefully escorted by the trained seals of the critical fraternity, and lovingly tended and watered by certain much too powerful pressure groups whose business is selling books, although they would like you to think they are fostering culture. Just get a little behind in your payments and you will find out how idealistic they are."

"Anonymous", in an essay first published in 1950.

I know, I know. It's not fair to quote this man, he was talking about something completely different. In his essay he starts out talking about realism in fiction, about Jane Austen, whose "chronicles of highly inhibited people [...] seem real enough psychologically."

Maybe that's what makes it sound so familiar. The psychology still seems real. It's still with us. There is more than a trace of "indirect snob appeal" in the position that legacy publishers and sundry trained seals are taking - a not-so-subtle appeal to readers to keep the riff-raff at bay and buy what the publishers see fit to print - and on their terms.

I could be wrong. Maybe the writer was referring, well before his time, to Amazon? You decide.

Regarding the term "legacy" as applied to publishers. I think Barry Eisler acknowledged that he borrowed it from the IT industry. "Legacy systems" in IT-speak referred, at one time, to the mainframe systems (IBM, DEC, Burroughs etc etc) that were the established systems for corporate computing ... until the PC came along in the early 80s and blew most of them away in the space of a few years. There was nothing wrong with the legacy systems as such. They did pretty much what they were supposed to do and the companies who made and maintained them made money for their shareholders... until new systems made them obsolete and people stopped buying them.

For anyone who's read this far and didn't recognize the quote at the outset, it's from Raymond Chandler, The Simple Art of Murder.

Laura Resnick said...

Mr. Cader wrote: " The notion that you, or Barry, or Hugh -- or Shatzkin, or me, are truly writing in defense of personal economic interests is illusory, and offensive."


By contrast, -I- am certainly writing in defense of –my- personal economic interests.

I've spent 26 years as a full-time midlist writer, and I care about two things: writers and readers.

More specifically, I care about my ability to earn a living as a writer—and to earn a better living than I have so far earned in the course of a very difficult career. (At least 6 publishers either dumped me or folded under me—so supporting myself as a writer has been a constant struggle. I have earned better and struggled less in the past 2-3 years, and I want to earn still more and struggle still less for the rest of my career.) And I care about my ability as a reader to be able to access whatever I want to read at a reasonable price, and about the opportunity for readers to access all of –my- work at a reasonable price.

I deal with a traditional publisher (DAW Books) because it's a good business decision for me—they pay me well, package my work well, and treat me as a respected partner in the publishing process. No other publisher, in 20+ years of working with publishers, ever did that (in fact, the others all treated me like a crack whore, to one degree or another). I like DAW for all of this. There's also a little matter of loyalty and honor, which are important to me; DAW contracted me at a time when no one else would, and they have always treated me very well, in an industry where no one else ever did. I appreciate that, and I have no intention on walking out on a company that behaves that way.

Given my experiences over the years in publishing, it seems unlikely I'll ever choose to deal with another US publisher (though I might choose to deal with overseas publishers). But I intend to remain in traditional publishing indefinitely, through my relationship with DAW.

I also self-publish—just backlist for now, but once it's all out there, I intend to start self-publishing frontlist, too. I have a long-range self-publishing plan, because I think this is a crucial market, particularly for anyone who is NOT a mega-selling superstar of the bookworld.

I can understand why super-successful, wealthy, media-profiled book celebrities like Patterson, Roberts, Preston, Turrow, etc. want to dance with the one that brung them. The system works well for them, so of course they support it. It would probably be unseemly of them NOT to support it, given the success it has helped them achieve.

Obviously, that #1 NYT bestseller are going to have different agendas and goals as the market changes. Theirs, presumably, is to maintain the system that has put millions into their bank accounts year after year. Me to expand out of a system that kept me poor and depressed for 20+ years. I was only able to buy my first house 2 years ago—and only because of the way that self-publishing augmented my income.

Bottom line, I think that all the anti-Amazon and pro-Hachette (and/or collusive pro-collusive price fixing) arguments keep boiling down to a conviction that publishers are important and their survival is paramount, and of concern to me, a priority, and tied to my fate as a writer.

And I disagree. I care about writers and readers. More specifically, I care about myself as a writer and about my readers, and also about myself as a reader. The past has been pretty bad for all these things. The present is better, and the future looks to be better, too.

Finally, NONE of the "what if?" scare tactics about Amazon or the future work on a full-time self-supporting writer who's already lost at least 6 publishers and is still standing.

Madelyn said...

Mr. Cader, I'd like to thank you for putting yourself forward and respectfully joining in a debate here. I found it very refreshing and informative. Even if it hasn't changed my mind about Amazon or self-publishing, I tried to read your comments with an open mind.

I'm curious about the survey you mentioned. Were the results posted somewhere that we could look at them for ourselves? Does anyone have a link?

Anonymous said...

I am surprised nobody is commenting on this. Cut and pasted from PM. Apparently profits are up at Lagadere despite the fact that Hachette authors sales are way down. What does this tell me? Hachette doesn't really care about whether individual authors are earning less because the corporation is doing fine, so it can absorb the loss from author sales? Preston, are you paying attention? Hachette doesn't care about you :)

FROM PM:

"Lagardere reported first-half of the year results after the close of the market in France on Thursday. Sales at Lagardere Publishing were 510 million euros in the second quarter (up 12 million euros) -- and 903 million euros for the full first half, up 2.5 percent on a like-for-like basis for the quarter but down 1.5 percent (or 14 million euros) in actual results because of foreign exchange. Earnings did fall to 51 million euros, down 28 percent from 71 million euros a year ago, due to an "exceptionally rich" publishing program in the first half of 2013.

"The company answered the big question of how the standoff with Amazon has affected their performance: very little, if at all. Lagardere said the dispute with Amazon had a "limited impact...despite punitive practices." Though individual authors have reported significant declines in sales of their books in the US, Lagardere said sales at HBG USA of 226 million euros (or roughly $305 million) were up 5.6 percent thanks to the acquisition and integration of Hyperion and the takeover of Disney's distribution, as well as strong sales of books by J.K. Rowling and Donna Tartt."

Barry Eisler said...

By odd coincidence, today President Obama acknowledged that the CIA “tortured some folks” (yes, folks. He called the CIA people folks, too. Just folks, who torture folks). Contrary to treaty and federal law, no one will be investigated or prosecuted. But don’t worry, because "We have to as a country take responsibility for that so hopefully we don’t do it again in the future.”

http://www.theguardian.com/world/2014/aug/01/obama-cia-torture-some-folks-brennan-spying

You might wonder how there can be any taking of responsibility for breaking the law if the law goes unenforced. Which brings me to Michael’s thoughts on anonymous sources in journalism…

Amazon executives claim on the record that Hachette has been dragging its feet, and lay out a whole timeline for the foot-dragging (see William Ockham’s reconstruction at the link below). An unknown Hachette official, who requested anonymity and was granted it by Publisher’s Lunch, then denies Amazon’s claim.

http://jakonrath.blogspot.com/2014/07/amazon-hachette-sounds-of-silence-guest.html

Imagine you’re a child, and terribly unsophisticated about the worlds of journalism, business, and publishing. Might you ask… “Why won’t Hachette deny this in public? Don’t they want people to know the truth?”

The child would know why, too. Because: the Hachette official was lying. But failing to understand something even a child would recognize, Publisher’s Lunch granted that executive anonymity rather than saying, "Sorry, if you want to correct that timeline, you’ll have to do so on the record, just as Amazon did.”

Instead, knowingly or not, Publisher’s Lunch allowed itself to be used to launder corporate bullshit into what looks on the surface like journalism.

And Michael’s response to being criticized for this is, "Hachette did deny Amazon's claims of dragging their feet, albeit in a fashion Barry did not like -- but the denial was issued nonetheless.”

Wow.

The fact that you would believe — and claim in public — that “Hachette” is responsible and accountable for something uttered by some presumptive executive who wouldn’t even agree to have his name attached to the statement is breathtaking. Do you also believe that when some anonymous administration official is quoted in the newspaper, that’s the same as the White House issuing a public statement?

As I explained in my post to you on this topic, good journalism isn’t about what some other corporation does or doesn’t do in its own press releases. And it’s not about what someone like me “likes” or doesn’t like. It’s about what’s more likely to result in accuracy, transparency, and accountability… and what’s more likely to result in distortions, falsehoods, and propaganda. You really ought to read it — for the links to informed thinking on this topic if for nothing else.

http://barryeisler.blogspot.com/2014/07/publishers-lunch-and-pernicious.html

Michael, there are times when the sensible and dignified thing to say is just, “Those are good points. Thanks for bringing them up — I’ll consider them.” Instead of digging a deeper hole for yourself.

Ponder whether this is one of those times.

But however or even whether you want to respond, again I hope you’ll reconsider your practices on granting anonymity to people who have no legitimate reason to ask for it. Why not correct mistakes? Why not try to be better?

Peace.

William Ockham said...

I am a bit disappointed that Cader didn't respond to me calling bullshit on his pricing assertions. Ah well, no one is required to respond to annoying critics.

On the other hand, he brought up the Pew Research survey. I am going to go out on a limb and claim that I know more about that data than Cader does. I might know more about it than anybody outside of Pew. AFAIK, Pew is the only reputable public pollster that releases the raw data from their surveys (generally six months after they report on it). I have requested and analyzed that data pretty carefully. I have learned a ton of stuff about readers that way.

But you don't have to know much about that data to know that Cader is whistling in the dark when says only 4% of readers are ebook-only. That is totally irrelevant. Just think about other technological changes. Did the number of houses that were microwave oven only track the rise of microwaves? Spoiler alert! No.

Let's look more content-related markets. How about television replacing radio as the delivery mechanism for audio episodic stories in the US? Did the number of homes with TVs and no radios tell you anything about how the function of the radio industry was changing? This is actually a good case to look at. Radio didn't die off. The nature of radio programming changed completely. That didn't happen overnight. For five years in the '50's, Dragnet was a TV series and a radio series. At the same time.

The fact that 75% of publisher income comes from print is their choice. By their own admission, they have engaged in a four year battle to slow the adoption of ebooks.

Cader is coming off more and more like a shill. Based on his inside knowledge, he thinks Amazon is desperate and flailing. I don't see that, but I find it pretty easy to understand why someone would assume that a publication called Publishers Lunch speaks for publishers. That seems to confuse Cader. If his publication is what he describes, he should change the name.

I will challenge Cader to make a very simple statement. Penguin, Simon & Schuster, Hachette, MacMillan and HarperCollins broke the law in pursuit of their business agenda. We all know that is true. Why won't he say it? It is the most newsworthy thing that has happened on his beat in those 14 years.

Anonymous said...

Schatzkin also denies there was collusion.

Rob Gregory Browne said...

Schatzkin also denies there was collusion.

So how, then, do the deniers explain the DOJ suit, the caving of the publishers in question, and Apple's loss in the courts?

Anonymous said...

Rob, you have to ask Shatzkin. I don't get it, either. I would guess "the court was wrong" is at least part of the reason.

What I'm finding interesting in all of this is how stupid the defenders of traditional publishing come across. You don't see Hachette out here defending itself. You have people like Shatzkin and Cader doing it for them.

Why? Obviously it's their job. But it's amazing how dumb they end up sounding.

Rob Gregory Browne said...

Rob, you have to ask Shatzkin. I don't get it, either.

I'd rather eat ground glass. Exchanging any kind of dialogue with Shatzkin is an exercise in frustration. The apparent cognitive dissonance is astounding.

Laura Resnick said...

"So how, then, do the deniers explain the DOJ suit, the caving of the publishers in question, and Apple's loss in the courts?"


The apologist explanations I have seen:

-They didn't do it, and in settling they cannot be said to have done it; they can only be said to have decided it would be less ruinous to settle with the DoJ than to fight a bogus DoJ case (and also a bogus class action suit fom 30+ states, which they also settled).

- The DoJ is a sock puppet of Amazon, and the publishers were unfairly railroaded and bullied by these entities

- Collusive price-fixing was an essential "solution" or the "only solution" to the problem of Amazon, and therefore it should have been allowed, regardless of what the law says about it

- It wasn't really an antitrust violation, and the DoJ should never have pursued this, and it was a bad ruling, and it's somehow all President Obama's fault

Kirk Jolly said...

I hope this comment gets read because I think Cadet let the cat out of the bag unintentionally while trying to be snide. He said, "Consumer prices are a separate issue. Higher prices to consumers may have been the result on some books, but it was not because publishers raised their prices. Publishers lowered their prices, but eliminated discounting."

This illustrates a central point that has been touched on many times by Joe and others, but he is essentially saying that at the end of the day, publishers don't really care about readers because readers are not the publishers customers. Bookstores and distributors are the publishers customers. Why do you think Apple was so willing to take the Agency Model of pricing? It cost them less per book of course and all they had to do was give up pricing control which is fine as long as your competitor, Amazon, is forced into the same pricing structure.

The true middleman nature of the publisher has just been revealed by a publishing industry shill. Somebody who has the inside scoop as he put it just admitted, frankly and blatantly that publishers do not give a flying shit about the readers. I'm surprised this hasn't been pointed out yet.

Liz said...

At least Cader is willing to discuss this openly unlike a lot of the people Joe fisks, but, that said, nothing he has done though has convinced me that he's not a corporate shill. Mike Shatzkin as well. He can be offended all he wants. After all, it's easy to get offended, but hard to actually show you're not a corporate shill..if you actually are one. The same thing goes for Mike Shatzkin, though I think it's obvious that Mike is a much bigger shill than just about anyone willing to speak out about publishing right now. He has next to no integrity left.

Smart Debut Author said...

Shatzkin next to no integrity left?

Try no integrity left at all. Instead of helping publishers see how fucked they are unless they adapt, he's blowing reassuring smoke up their asses, while seeing if he can make some fast bucks off their dying corpses, by selling them vintage-2004 "metadata" services for six figures a pop.

Liz said...

That's such a good point, Kirk. I don't see evidence that the publishers do care about readers. All they do is defend themselves and why they think they should be allowed to charge higher prices. When have the readers ever come into the equation? When have the authors? They think this business is about them. When you look at it that way, is it really any wonder that they're failing at their jobs so miserably and being crushed by Amazon? This is one reason why I'm a little disgusted by all the people defending them, claiming that we can work with them. How do you work with an entity like that? What reason would you have to even try? They don't even think they did anything wrong and they certainly don't care about what happens to anyone else but themselves. No one should worry too much if they go out of business.

Liz said...

"Shatzkin next to no integrity left?

Try no integrity left at all."

I was trying to be be a little gentle, but yes, I think he has no integrity. I think he's trying to make money off the publishers, so he's trying to ease them into the understanding that they're screwed. He's going to make sure he sells them more useless "advice" before they're completely dead in the water though.

I hope I am not the only one who has noticed more "experts" in these ancillary industries popping up to "aid" people through this transition with their experience in traditional publishing. They see the writing on the wall and they're just trying to grab those last few bucks from the desperate and confused.

Nirmala (free spiritual ebooks) said...

I was just wondering to myself if Amazon might be better off at this point if it just stopped delaying shipments and removing pre-orders. They could make a simple statement to the effect that Hachette has still been dragging its feet, and so since their efforts to encourage a quicker negotiation are not working they will return to normal policies out of consideration for the authors being impacted.

Or maybe they could reinstate normal policies for debut authors, and apply pressure by delaying orders only for Hachette's established bestselling authors.

Either of these could help Amazon in the public perception of their side of the issue, and either approach would kneecap the Author's United movement.

Or maybe I should spend my time thinking more about my own business :)

shugyosha said...

Risky. If Amazon does that, accepts shipments and orders and then Hachette pulls back its titles... what? There's no contract in place.

Take care.

Anonymous said...

Barry said:

"Do you also believe that when some anonymous administration official is quoted in the newspaper, that’s the same as the White House issuing a public statement?"

Ha Ha. The entire world knew that the CIA was torturing people. The White House seems to have caught up yesterday. Not that they seem ready to do anything much about it. Where's the DOJ now?

So yes, sometimes statements from just about anybody but the official source can be valid.




sheila quigley said...

why all this noise about amazon wanting e books a 9 99, which is a good price compared to the real bad guys, who never get a mention, the supermarkets who sell brand new hardbacks at five pounds, and whose shelf space for fiction has been slowly getting less and less over the last year.
And the big bad guys publishers who in their greed got rid of the net book agreement and made way for all of this to happen.