Read this before you take sides in the tussle between publishing houses and Amazon, Flipkart

25 October 2014

From Tech in Asia:

The tussle between big book publishers and Amazon, which started in the US, has now spilt over to India, where local ecommerce leader Flipkart has also been dragged in.

The arguments made against Amazon and Flipkart have a familiar ring – that their discounts will kill the publishing industry in the long run, that the two companies are becoming a duopoly, and that ebooks need to be priced higher for the sake of authors.

The publishing houses enjoy sympathetic coverage in the mainstream media in both the US and India, as the godzilla Amazon makes an easy target for scare-mongering. This report in The Economic Times, for instance, presents a one-sided view of the issue. It doesn’t alert readers that the claims made by publishing houses are exaggerated on several counts, not the least of which is that digital publishing and online distribution are hurting authors.

Ashok Banker, well-known Indian author of the Ramayana Series, is unequivocal when he explains how much he has gained from ebooks. He tells Tech in Asia:

The ebook editions of my books now outsell the print editions by a factor of easily 100:1. As in, for every 100 ebooks sold of a particular title, the publishers sell barely one print copy. To look at it another way, the print editions have increased in sales at a rate of about 10 percent each year, while ebook sales have doubled every six months or so for the past three years.

. . . .

By and large, however, the well-established authors, who manage to wangle decent royalty deals for printed books, pitch in for the brick-and-mortar publishing industry. And they are the ones usually quoted in the print media. Amish Tripathi, author of the much-loved Shiva Trilogy, had this sweeping statement in The Economic Times: “Online stores are not convenient for browsing as against a physical bookstore where people spend hours discovering new titles. This creates a problem for new authors who find it difficult to be visible on these sites.”

. . . .

Initially, when he submitted the manuscript of his first book to the publishers, all of them, without exception, rejected the book. Then Tripathi decided to self-publish. His agent invested in printing, and he in its marketing. The management techniques Tripathi learnt at IIM (Indian Institute of Management) probably helped him spread the word about the book on social media. “When my book became a best-seller within a week, and sold 45,000 copies in less than four months, the publishers came back to me,” he told me in an interview earlier this year.

. . . .

Ashok Banker too, despite a successful start to his writing career, got stymied by the “MNC factory publishers,” as he describes the major publishing houses. There were no takers for his Ramayana Series in India, which then got snapped up abroad. He explains what prompted him to eventually take the self-publishing route:

Once the Ramayana Series was bought by all those foreign publishers, the Indian publishers immediately became interested in my mythological retellings and bought Indian rights – but still did not expect mythology to sell as well in India as it might sell abroad. So despite the success of the series, when I tried to sell my next titles, they continued to reject them or offer abysmal advances. This was what prompted me to retain ebook rights of all my works and sell them independently on my own website and also on the Amazon Kindle platform.

Banker had the last laugh because mythology went on to become the biggest-selling category in Indian publishing. “Now my publishers want the ebook rights, but I’m not selling them at any price,” he says happily.

Link to the rest at Tech in Asia and thanks to T.M. for the tip.

We didn’t exactly believe your story

25 October 2014

We didn’t exactly believe your story, Miss O’Shaughnessy, we believed your 200 dollars. I mean you paid us more than if you had been telling us the truth, and enough more to make it all right.

Dashiell Hammett

Paul Krugman Is Wrong About Amazon.com

25 October 2014

From The Motley Fool:

The no-holds-barred fight between Amazon.com  and Hachette Book Group over e-book pricing took a turn for the worse recently (for Amazon, that is) after a number of prominent commentators suggested the U.S. Justice Department should sanction the e-commerce giant for alleged violations of antitrust laws.

. . . .

But to anyone familiar with antitrust legislation — more specifically, federal appeals courts’ interpretation of the Sherman Antitrust Act — it’s clear that claims like these are nothing more than hyperbole. While Amazon is certainly a large and growing online retailer, even a liberal interpretation of its share of the domestic e-commerce market puts the figure at less than 50%, which is well below the 70% threshold courts typically require as proof of monopoly power.

. . . .

The gap between hyperbole and reality widens when you consider the e-commerce market’s insignificance in the context of overall retail sales. In 2013, for instance, domestic e-commerce sales added up to $263 billion, which is a fraction of the $4.5 trillion in total retail sales processed in the United States over the same period.

And even if a court found Amazon to possess monopoly power — as one could somewhat realistically claim it does in the e-book market — that’s still only half the battle, as it must also be proved that said power is being exercised to the detriment of consumers. According to the Justice Department’s antitrust guidance, “Prohibiting the mere possession of monopoly power is inconsistent with harnessing the competitive process to achieve economic growth.”

To prove Amazon is illegally exercising this hypothetical power, in turn, one would have to demonstrate that it is raising prices or curtailing supply by, among other measures, keeping competitors out of the market through predatory pricing or other prohibited means. Implicit in this is the assumption that Amazon earns monopoly profits — that is, the economic profits that accompany inflated prices. But as many investors know, Amazon has never reported meaningful earnings. In 2013, it generated a mere $274 million in net income from $74.5 billion in sales. That equates to a profit margin of only 0.37%.

Link to the rest at The Motley Fool and thanks to Dusty for the tip.

Why the Book Publishing Industry Exists

25 October 2014

From The New Republic:

Matt Yglesias has a little “real talk” for us at Vox. Amazon is doing us all a favor, he says, by crushing the fundamentally useless middleman between author and reader: the book publisher.

Yglesias’s piece is mostly a rehash of familiar arguments that often come from people who occupy a similar position to Yglesias’s: They are, broadly speaking, outsiders to the publishing world and more closely associated with the broader fields of business, economics, and technology. They appear to believe their outsider status allows them to see more clearly how broken publishing is; they’re not captive minds. The insiders tend to respond that the outsiders could stand to be less ignorant of the industry they’re criticizing. This fight tends to devolve quickly.

. . . .

A publisher’s list of books is in essence a risk pool, a term most often associated with health insurance. In the insurance business, the profits from the healthy people outweigh the big losses from the sick ones because the healthy outnumber the sick. In publishing, it’s the opposite, yet the underlying concept is the same. Most books lose money, but the ones that make money earn enough to cover all those novels that didn’t sell.

The publishing scenario that Yglesias is advocating is a world without health insurance. (Ironic, I know.) In a system without the publisher operating as middleman, where the author takes his life’s work and just posts it to Amazon, each book becomes a lonely outpost in the stiff winds of the marketplace, a tiny business that must sell or die.

. . . .

Mark Krotov, an editor at Melville House, points out on Twitter that in posts like these two, Yglesias has often recommended “good, unusual books” such as Maxine Hong Kingston’s Tripmaster Monkey and Daniel Dennett’s Consciousness Explained. “I’m confident that none of these books, as different and diverse as they are, could ever have found their audience without a publisher,” Krotov writes.

. . . .

The observation that book publishers are not charities but business enterprises is largely accurate, but it does not capture the whole truth.

Link to the rest at The New Republic and thanks to Meryl for the tip.

PG always finds it interesting when someone tries to argue for the necessity of big publishing in an age of Amazon, ebooks, the internet and freelance editors.

Because . . . risk pool! Find an audience!

Lurking in the background is the meme that authors are idiot savants who need someone to do the practical work necessary to sell their books.

Does Amazon’s Monopoly Really Matter?

25 October 2014

From Megan McArdle at BloombergView:

The first thing to remember about the Amazon/Hachette Book Group dispute is that this sort of thing happens all the time in business. When two big companies negotiate, it’s like Mothra and Godzilla: Each party can throw around a lot of weight, which means some collateral damage. It’s not exactly unheard of for a company that doesn’t like a supplier’s price to stop carrying the product, or to deny the supplier valuable end-cap space, or otherwise deprioritize the sales of the contested items.

The second thing to remember about the Amazon/Hachette dispute is that writers are categorically unable to see what they do as in any way akin to, say, selling potato chips. Writing is special and sacred! The sight of our product being treated like Chef Boyardee spaghetti is more than our tender souls can bear. And unlike grocery suppliers, writers have access to column space in which to pour out our anguish. That’s why so much ink has been spilled over this contretemps.

The third thing to remember is that publisher interests are not the same as author interests. Neither are Amazon’s.

. . . .

This is actually a deep debate about monopoly. The standard argument you’ll hear about monopoly is that it’s bad for consumers. That wasn’t always the case. If you look at a case like the one against Alcoa, decided in 1945, it’s not clear that the target was consumers; Alcoa was holding onto its monopoly by selling final aluminum products at such a low price that new entrants found it impossible to compete. But at its inception, anti-trust policy had a much broader orientation toward producers as well as consumers. Over time, it came to focus on consumers, so that they are all you hear about today.

. . . .

You will note that authors complaining about Amazon’s war on Hachette rarely say, “This is terrible because readers will buy someone else’s book instead of mine”; rather, they focus on the harm to the reader, even though having to wait a few weeks for your book, or order from Barnes & Noble, ranks pretty low on the list of terrible things that can happen to someone.

. . . .

The problem with using antitrust laws to protect producers is that smaller incumbents have a broad interest in nothing changing. Small bookstores were better off without Barnes & Noble, and Barnes & Noble is better off without Amazon. Demanding protection from a “monopolist” that has less than 50 percent of the market easily turns into a demand to protect small, inefficient producers from innovation. This is unworkable, unless you’d think we’d be better off frozen in 1935.

. . . .

Writers are in particularly parlous shape because every segment of the industry seems to be hoping that they’ll be able to survive by getting a subsidy from some other segment: the publishers hope to save on publicity by giving contracts to well-known writers with a good “brand,” and the news outlets wanly suggest that writers getting paid pennies a word could make it back by writing books. So naturally, a war on the one segment that still, sometimes, actually makes money from consumers buying the product seems particularly frightening.

Link to the rest at BloombergView

Literary agents look to change ‘distant’ image

24 October 2014

From The Bookseller:

Literary festivals can “provide help and support for new writers” and enable them to ask questions in a “relaxing, happy, supportive environment”, event organisers and literary agents have told The Bookseller.

Festivals can also bring would-be authors closer to the publishing process by connecting them with agents, who want to move away from the perception that they are “very distant and difficult to meet”.

Earlier this year, the Battersea Literature Festival and the Literary Kitchen Festival included dog walks led by literary agents as part of their programme.

Agent Jo Unwin, of the Jo Unwin Literary Agency, said she started the dog walks “because it seems to me that the people who find it easy to submit to agents aren’t necessarily the best writers”. She added: “Some people feel more entitled to write than others, and it’s just a way to open things out a bit. Of course the danger with being too open is that you get inundated by unpublishable work, so it’s all a bit of a balancing act.”

. . . .

Andrea Mason, founder of the Literary Kitchen Festival, agreed: “Agents are people like us and they want your manuscript.”

Link to the rest at The Bookseller

I’ve been as bad an influence

24 October 2014

I’ve been as bad an influence on American literature as anyone I can think of.

Dashiell Hammett

Is it time to chop down Amazon?

24 October 2014

From The Globe and Mail:

Amazon has knocked a hole in the book publisher’s barricade, agreeing to a new contract with Simon and Schuster, a CBSowned company. A settlement of the row between Hachette and the e-retailer over book pricing cannot be far off. Yet, in political terms, the jury is still out as battle rages between Amazon’s enemies, who accuse it of predatory pricing and of killing off bookstores, and its supporters, who say Amazon’s disruptive business model supports a community of self-publishers and offers consumers cheaper books.

. . . .

A thousand authors (not all of them with Hachette, and, notably, Stephen King) protested that writers were being held hostage by Amazon and, oddly, the American political Left has taken up the cause of big publishing. Paul Krugman, the New York Times columnist, accuses Amazon of behaving like Rockefeller’s Standard Oil – bullying suppliers and competitors by cutting prices. Franklin Foer, editor of New Republic magazine, calls for government and regulatory action to stop a new golden age of monopoly led by Amazon, Google and Wal-Mart.

It is difficult to feel sorry for big publishers. They have been digging their own graves for decades, ignoring new technology, relying on antiquated marketing and a small cabal of blockbuster authors to support a lifestyle business that employs college arts graduates from nice families.

That a community of established authors supports the big publishers is hardly surprising; the writers’ deepest fear is loss of the cash advance, a payment by a publisher that allows a trusted author to spend a year writing a book without the need of a day job to pay the bills. Amazon promises the radical low-budget, self-publishing solution to the untested, untried new author and Jeff Bezos, Amazon’s founder and chairman, has proposed a deal that splits the cover price thus: 35 per cent each to the author and to the publisher and 30 per cent to Amazon.

Needless to say, it doesn’t appeal to Hachette, which would doubtless prefer not to hand over a third of publishing income to authors, compared with the usual maximum royalty of 10 per cent. But the real fear is that the Amazon model, pushed to its logical conclusion, would remove entirely the cost of publishers from the equation, replacing them simply with an agent or manager or nothing.

. . . .

But the fundamental question is whether we think fair competition is just about consumers getting a good price or whether we think that diversity of supply is a good in itself, something that we experience in healthy economies. If we think that more and better books are written when authors have financial backing, then we may need well-capitalized publishers. Better still would be a new model for the writing business, a new kind of Amazon that is prepared to risk capital on human creativity and not just suck the cash flow out of a river of cheap goods.

Link to the rest at The Globe and Mail and thanks to Tudor for the tip.

Amazon’s Spending Leads to Biggest Quarterly Loss in 14 Years

24 October 2014

From The Wall Street Journal:

Amazon.com Inc. ’s soaring ambitions are coming at a steep cost, dragging the e-commerce giant to its largest quarterly loss in 14 years.

A surge in spending on new-product development, music and video licensing, and other parts of the Seattle company’s expansion strategy led to a net loss of $437 million in the third quarter, worse than its year-earlier loss of $41 million. The wider loss came despite a 20% jump in revenue to $20.58 billion.

In another stumble, Amazon took a $170 million charge on its Amazon Fire smartphone, which was released in July but is selling poorly, analysts say. The company also issued a lukewarm sales forecast for the current quarter, its most important of the year because of holiday-related spending.

. . . .

Amazon’s chief financial officer, Tom Szkutak, struck a more cautious tone in a conference call with reporters than he has in the past, suggesting that the fast-moving company might be forced to get choosier about where it invests.

“We do have a lot of opportunities in front of us,” he said. “We certainly have been in several years now of what I will call an investment mode, but we know that we have to be very selective about which opportunities we pursue.”

. . . .

So far in 2014, Amazon has released its first smartphone, the Amazon Fire, and a new set-top box. It began a streaming music service and spent heavily on video programming, expanded its same-day delivery service and now plans to open its first brick-and-mortar outlet. The company is adding warehouses to speed delivery and data centers to support its rapidly growing business as the computing center for other companies.

“Clearly, they’ve been spending money everywhere,” said Michael Pachter, a Wedbush Securities analyst. “They’ve been releasing these new products—the phone, the set-top box, streaming originals—but it’s not clear how that leads to sales.”

Amazon said its spending on “technology and content,” which includes new-product development, licensing for music and videos, and the data centers, rose 40% in the latest quarter—or twice as fast as revenue. Spending on technology and content consumed 12% of revenue.

. . . .

Also increasing Amazon’s expenses are its needs to staff new warehouses in Florida, California and Texas. In the third quarter, the company boosted its employee count 36% to 149,500.

Link to the rest at The Wall Street Journal (Link may expire)

Little White Lies: Are They Good or Bad in Publishing?

24 October 2014

From author Judy Mollen Walters via The Huffington Post:

Little White Lies. We all use them in daily life. A friend asks us if she looks like she’s gained weight and we say no when it does look like she’s put on a few pounds.

. . . .

But what about little white lies in publishing? Those happen all the time, too, yet many of us argue, they’re good, for both the liar and the recipient.

. . . .

My experience with little white lies started as a naive but hopeful author, sending out query letters trying to find an agent. Some agents sent a generic rejection letter but others wrote a little personalized note. I got excited about “nice” rejections — hopeful that they “meant” something. But in the end, they probably didn’t mean a thing more than no. No means no, no matter how nicely it is said.

Then I got an agent and we moved to trying to find a publishing house and editor for my work. Editors generally wrote lengthier rejection letters and again I read into them. The editor said the characterization was good! The editor said the subject matter grabbed her! Whatever it was, I clung to it, believing it meant something. But my agent would remind me that no meant no, and no matter how an editor “sugar coated” it, a rejection was a rejection. She went so far as to say that it was common in the publishing world to “cushion” the rejection with niceties and that I shouldn’t believe them. She was right. Rejections are rejections. How the person chooses to say it should not mean anything to you.

I left my agent when I decided to self publish. This time, I experienced the little white lies from other authors. Over the years, I had befriended a few authors online whose work I especially admired. They wrote contemporary, family centered fiction; so did I. The only difference was that most of them were traditionally published. I reached out to quite a few to try to get blurbs for my book cover. They all said no. Most said no with the “I’m too busy,” line. I sensed they were lying, especially when I would see their names on blurbs for lots of other books over the coming months and years.

. . . .

When I brought this up with other writers recently, a traditionally published author told me that frankly, traditionally published authors didn’t really want to associate with self pubbers. They didn’t want their names anywhere near our work. And that’s why they told us they were too busy. They didn’t want to tell us they thought our work would suck (even though they hadn’t even read it yet).

. . . .

I’ve talked with other writers about this. They agree that it’s difficult to tell someone their work is not ready to see the light of day, how treacherous it is to walk the fine line of constructive criticism and “this really stinks but I can’t tell you that.” We’ve talked about how “nice” everyone is in publishing. It’s almost taboo to be anything but super sweet to someone you don’t know, or even to people you do.

Link to the rest at The Huffington Post

Here’s a link to Judy Mollen Walters’ books

 

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