Barry, Joe, & Scott Turow
From Joe Konrath and Barry Eisler at The Newbie’s Guide to Publishing:
Scott Turow, President of the Big Publishers Club (aka the Authors Guild) just blogged about the Department of Justice lawsuit against legacy publishing’s agency pricing model.
. . . .
Scott’s original words are in italics; my and Barry’s reaction follow in plain text.
Here we go…
Yesterday’s report that the Justice Department may be near filing an antitrust lawsuit against five large trade book publishers and Apple is grim news for everyone who cherishes a rich literary culture.
Joe: Translation: It will be grim news for bestselling authors and billion-dollar publishers.
Barry: I always wonder what people mean by these vague references to “rich literary culture” (and when I see the same phrase crop up in more than one place, it really sets my bullshit detector tingling). Ordinarily, these buzzwords sound appealing in the abstract, but dissolve like an urban legend when subjected to a bit of thought.
The only books that contribute to a rich literary culture are the ones sold at agency (meaning collusively high) prices by legacy publishers? Or sold through independent bookstores? The publishing establishment must be free to collude on prices or culture will perish? The publishing establishment contributes more to culture than books themselves? The publishing establishment is culture?
That’s Scott’s argument? It’s a strange one.
. . . .
We have no way of knowing whether publishers colluded in adopting the agency model for e-book pricing. We do know that collusion wasn’t necessary: given the chance, any rational publisher would have leapt at Apple’s offer and clung to it like a life raft.
Joe: Translation: It could be that publishers didn’t collude, but all independently came to the same conclusion and independently presented it to Amazon at the same time with exactly the same terms.
Barry: Like the coincidental lockstep 17.5% digital royalties offered in all legacy publishing contracts. These things just happen sometimes. By accident.
Joe: Could be some sort of hive mind. Or psychic powers. I wonder if the DoJ will believe the “it’s-just-random-luck” defense.
Amazon was using e-book discounting to destroy bookselling, making it uneconomic for physical bookstores to keep their doors open.
Joe: Translation: Amazon was using free enterprise to gain market share, something that worries inferior competition.
Barry: Oh, come on. Amazon’s lower prices were intended to “destroy bookselling?” Not to sell more books and gain market share? It’s ipso facto evil to compete via lower prices?
I really wish all companies would collude to charge higher prices. The world would be a better place.
Joe: The Big Publishing Cartel monopolizes distribution for decades and that’s fine, but some upstart comes in and starts treating authors and readers with consideration, and it is a call to arms.
Barry: This argument is just bizarre. I mean, Amazon, which sells more books than anyone, is destroying bookselling? Amazon is destroying bookselling by selling tons of books?
Watch the linguistic dodge: Scott is implicitly arguing that the only model that counts as “bookselling” is the current model, built and maintained by legacy publishers and brick-and-mortar stores. That is, “bookselling = physical bookstores. Online bookselling doesn’t count as bookselling.” He’s arguing as though physical booksellers are the only legitimate organisms in the forest, while Amazon is some sort of exotic interloping alien species rampaging through a healthy native ecosystem. This is the only way to make sense of an argument that states, “Amazon is destroying bookselling by selling so many books.”
Why not just state the argument clearly? After all, Scott is former litigator and presumably knows how to write a careful legal brief. He could have said, “Amazon’s low prices were attracting so many customers to online bookselling that brick-and-mortar stores were suffering.” But the reaction to such an argument is much more likely to be, “Well, that’s sad, but it sounds like the way of the world. Like the record stores. I guess you can’t fight technology.” So instead, he wrote, “Amazon is destroying bookselling!” Which sounds evil and scary and is therefore a better call to arms. The problem is, this is a terribly tendentious way to state the argument, and it’s also a contradiction in terms. Maybe Scott would also argue that Apple is destroying computer-selling by selling so many computers, but logically, it’s pretty hard to see how someone could destroy bookselling by selling tons of books. In arguing that bookselling is destroying bookselling, Scott is making his biases as clear as his argument is turbid.
Joe: I love the term uneconomic. A synonym would be “someone else is giving customers what they want.”
. . . .
Publishing shouldn’t have to choose between bricks and clicks.
Joe: Translation: Publishing wants to sell paper books, because it controls the paper market. Now that Amazon controls the ebook market, publishing is scared shitless.
Barry: See how Scott’s piece is really about publishing, not about authors or readers? Because readers are choosing between bricks and clicks. So what does it mean that publishers shouldn’t have to? Publishers shouldn’t have to go in a direction dictated by end-user customers? Why shouldn’t they? Scott is arguing that publishers shouldn’t have to run their businesses based on what end-user customers want. Why not? What logic can we invoke that might create some special dispensation for publishers from the laws of business physics? It just doesn’t make sense — except by resort to the kind of sentiment Scott claims isn’t part of his position.
I have to say, it’s odd to see such a legacy publishing-centric article written by the president of something called The Authors Guild. I know you could try to make a “What’s good for legacy publishing is good for authors” argument, and that is what Scott is implicitly doing, but still. The logic and connection are pretty strained.
Joe: Has any business succeeded by punishing the consumer? DRM, high prices, windowing, long lag times from manuscript completion to market, restriction of new works (aka the lovely non-compete clause), all seem to show disdain for readers.
But at least legacy publishers make up for that by treating writers so well.
. . . .
Joe: People accuse me of shilling for Amazon, because Amazon is making me a lot of money. But here’s something my critics keep missing: what I’m saying makes sense. And I have experience, examples, numbers, facts, and logic to support my position.
Now, Scott of course similarly can be accused of shilling for the Big 6, because they made him rich. Brick-and-mortar stores also added to his considerable wealth. But that’s not what matters. What matters is, his logic is bad, he’s ill-informed, and he’s the President of the freaking Authors Guild, which is supposed to represent authors, not publishers.
Does he really not understand, or not care, that Amazon is putting money in authors’ pockets? Does he not see the flip side of this coin? Or does he just want to trick his peers into buying this bullshit?
Barry: I don’t know the the Authors Guild well, and I imagine they do various good things for authors. But when I read things like Scott’s piece (and the stunningly whiny and wrongheaded post someone did on the Authors Guild website a few weeks ago about how mean Amazon is), I start to suspect that while they might represent authors’ interests, what they really represent is those interests consistent with the interests of the larger publishing establishment with which the Authors Guild identifies and of which it is a part. That’s okay, as far as it goes, but I think it’s best for authors to have an accurate idea of just how, and how far, the Authors Guild actually represents their interests, and through what kind of a prism it views the world of publishing.
Joe: Beware any organization that’s more concerned about its Top 2% than its Bottom 98%. Beware any organization that is more concerned about its own survival than it is about solving the problems it was created to solve, or serving the people it was created to serve.
But most of all, beware any organization that can’t argue based on facts, numbers, and logic, and that has to try to sway opinion with buzzwords and emotion, instead.
President Turow didn’t say anything substantive here.
But what he didn’t say speaks volumes.
Link to much more at A Newbie’s Guide to Publishing
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I love three ways…er…three way conversations. Glad someone translated for me.
Splitter
http://www.despair.com/changewinds.html
Which ox is being gored, and by what?
Regards,
Ric
I believe the REAL concern here is, the Big 6 (to the benefit of authors like Turow) cannot game Amazon’s system. They can’t manipulate Amazon’s bestseller lists which are based on actual sales rather than retail orders. They cannot buy #1-10 bestseller slots to get placed at the front of the store. They can’t ship 10k titles of a favored book and let others die in storerooms. They cannot stack dozens of copies on a front table to lure customers. Turow’s book is on the page with all the rest of the riffraff, to rise or fall on its own merits. On the page, too, are used books for OOP titles the publishers refuse to provide. The only way to become a blockbuster on Amazon is to EARN it. And yes, I can see where that makes some people very, very nervous.
You nailed it, Jaye. That’s how they do business, and they can’t do it that way any more. Unfair!
Jaye, I think you’ve nailed this right to the wall!
Publishers claim to be able to market books. But what you’ve described here seems to be the sum total of the ways they market books. Pay co-op, order large print runs, use a large print run to get reviewers interested (more likely these books will hit the bestseller lists). If there are no co-op funds to pay out and no (prestige) reviewers to attract and no best-seller lists up for auction (through the various games they play)…then they don’t know what marketing is.
If they lose out on their distribution lock (on printed books), then they also seem to lose out on their marketing lock (on all books). All their old levers break at the same time.
I suspect the more agile imprints, the ones who promote younger, more e-savvy business types up the ladder faster, will weather this out. They’ll create new bureaucracies to handle the world of books. But it’s going to be painful for them. Like walking from a well-lit room, with tables heaped with food fit for gorging, into a room that’s mostly dark, no clue as how large it is or where the borders are or if there are annoying things they’re going to bump into lying on the floor.
Welcome to the new world.
Zingo, Jaye.
I hadn’t thought about all those different ways publishers manipulate the system–at least, not all at one time–and I think you totally called it. How are they going to fare when their book has to depend, in a large part, on word of mouth? Sure, they get that now, but mostly because of the things you said–placement and the fact that they crowd out so many other books in brick and mortar stores. If you want something to read, and choices are limited to the top 20 bestsellers, or a few thousand books with their spines out that you have to physically sort through, it’s just a lot easier to go with the books placed on the tables at the front of the store.
I feel like you missed one of the biggest points in Turow’s article: that brick and mortar stores provide a better venue for readers to browse books and take a chance on new authors. Amazon is great for authors who have an established readership and authors who have the infrastructure for self-marketing, but for the rest of us writers, traditional publishers still offer the best way to distribute our books and reach out to new readers. I like to see my books available at multiple venues, and keeping traditional book publishers viable along with brick and mortar stores and on-line competitors to Amazon is good for readers and authors both.
Don’t get me wrong–the book publishing industry is as slow-moving and greedy as any industry, but championing Amazon just because it is whispering seductive pillow-talk at the moment isn’t any better. In fact, it’s downright short-sighted. Do we really think Amazon can continue to sell e-books at a loss? Of course not. The honeymoon period will be over soon, and then what?
Garrett, I’m going to respectfully disagree with you on that point. Speaking solely as a reader, I’ve been disenchanted with brick and mortar bookstores and publisher prices for years. The selection is too narrow and the prices are too high. I was doing all my browsing and discovering new authors at the library. Then I got an ereader. Now I BUY five to six books every week. I have no trouble whatsoever making new discoveries. I sure have no problem with the prices.
I cannot figure how or why Amazon became such a boogeyman. Again, speaking as a reader, their customer service is superlative. It does spook me a little at how GOOD their recommendations are. I love their deals and sales and I love how I can find what I want, when I want it. And you know what else? The indies–small presses and self-pubbers–are getting better. A lot better and doing it quickly.
As a writer, a little head’s up. Amazon isn’t selling MY indie ebooks at a loss. They give me “shelf” space and that spooky-good search engine thingabob and I give them 30%. It’s a fair exchange for both of us. You know, unlike my traditional publisher who has managed to finagle a way to give me only 11 cents royalty per ebook sold. Gee, wonder which one is engaging in unfair business practices?
Gotta agree with Jaye here: I haven’t been able to find anything in a bookstore for years — even the superstores. It’s all narrowly focused on bestsellers and what I call canon fodder (i.e. new writers who get dumped after a book or two if they don’t make it to the best seller list — who cares if they have a passionate audience?)
Yes, it’s true, I don’t often find new authors on Amazon — but that’s because the best place to find new authors is word of mouth. Google. Search on the stuff you know you like – favorite authors, genres, titles, subjects — and find people who like similar things.
Except….
Oh, you weren’t thinking like a reader. You were thinking like a new writer. “How will anybody find me?” Guess what? Bookstores aren’t good for you either. Do you realize how hard it is for a true unknown to find his way into a bookstore? Do you realize how few of those who “make it” to the shelf actually get a chance to stay there long enough to be discovered by the audience?
The key to a new writer being discovered is to stop being a new writer: i.e. keep writing and working and aging, and become an old writer.
The difference between Amazon and brick and mortar stores is that Amazon knows this, and never cuts you off at the knees. Brick and mortar stores? Cut you off before you get started.
Sorry, no, that’s the place where Turow misses it above all. Utterly. Completely.
Exactly. Long before I had a Kindle, I had become discouraged shopping at bookstores. I called it the Oprah Winfrey Effect. It seemed like the stores suddenly filled up with books that were on Oprah’s reading list, or books just like them. Unfortunately, I don’t seem to have the same taste in books as Oprah has, so I had a really hard time finding something that I wanted to read. The romance books that were similar to LaVyrle Spencer’s were gone, and she had retired. I couldn’t find a good thriller to save my life, and I wasn’t into chick lit. Half the books in the store were just copies of the most popular books.
Contrast that to Amazon, where I found a bunch of new books based on the ‘also boughts’. And these were paperbacks and hardcovers, not ebooks.
traditional publishers still offer the best way to distribute our books and reach out to new readers
Not when the book in question falls into the “well, we’re not really sure which shelf to put it on” crack of genre fiction, they’re not. Also, not if it’s more than 100K words. Go with both, and a duology besides? Ha-ha. Publishers won’t touch me with a ten-foot barge pole!
Amazon is not my BFF. However, at the moment, it’s a very good tool for getting my stuff out there where anyone can see it. (I am just terribly wary for the moment when the fire-on-the-stick might get blown by the wind to burn an unwary stick-holder.) Self-publishing is intoxicating, even for the peanuts I’m currently getting. (Smashwords is also a very useful tool, and I have more faith that they see “their” authors as vital to their existence. Seeing as how we are.
)
And, as noted, Amazon is no longer selling ebooks at a loss. (Kindle Fires? Maybe.) Would they do it again if agency pricing is deemed to be illegal? …maybe. Maybe not.
As an author, I like agency pricing; I’m going to be sad when the government takes away the gun that many tradpublishers have pointed at their feet.
How many new writers get front of store placement? End cap? Even front out on shelf? Physical bookstores are set up to guide you to the bestsellers. Long before the Kindle was even a glimmer of an idea to Amazon, I had discovered more new and obscure books on Amazon than I ever found in any bookstore. Since the Kindle, and especially since agency pricing made current bestsellers expensive, I’ve been taking a chance on all sorts of new authors.
When I was in a physical bookstore, I wouldn’t bother to go to the trouble of standing in line and paying for a single book – I needed enough to get over a threshold before I was willing to do that. A new author that I hadn’t heard of? Probably not going to push me over a threshold. Amazon has made the buying experience frictionless; the threshold is simply, am I interested enough in this book to pay the price?
Another reason the statement of finding new authors doesn’t apply. The number of new authors to be found via the legacy publishers vs. the indie market are giant because the “gatekeepers” keep most of the new authors and their works unavailable to the public. The scant number of new authors in a bookstore, sitting on a shelf for three months (if they are lucky) is miniscule to the number of new authors someone will run across on Amazon, who’s book stays on the “shelf” no matter how poorly it sells at first.
Which venue do you really have a better chance of running across a new author?
Mr. Copple, you raise another issue I feel like this Passive Voice blog post neglects to address from Turow’s argument: Amazon has opened the flood gates for anyone to self-publish their book, and the sheer number of books from new, would-be authors has created so much noise that it is extremely difficult for new, noteworthy authors to get recognized.
The one good thing the old publishing system of literary agents and publishing house editors provided was a filtering process to weed out poorly-written books, and a thorough editorial process to make sure books that went to print met an exactly set of standards expected by the reading public. (Yes, yes, I know many great books never saw print due to publishing prejudices, and hundreds of heinously-written books managed to somehow get published, but the point is the system is set up to deliver a good product to the reading public.)
Now, though, anyone can go through Createspace and publish a book without any editorial or filtering process and sell it on Amazon. There are literally millions of books to sift through. Is this a good thing? Sure it provides “shelf space” for a lot more new writers, and on one had, yes, it’s nice to let the readers have the choice to pick what they want. On the other hand, I feel like most readers, like consumers of any other product, don’t want to work so hard to find a readable book.
When I go to the car dealership, I expect the cars on the lot meet a set of standards so that the car I purchase is safe and up to code. Yet, I can’t say the same thing for books I browse through on Amazon.
I can’t help but feel that much of this championing of Amazon is a sour apples reaction from writers who have been rejected from the traditional publishing world. Amazon accepts them with open arms, and yes, makes it very easy to market books and interact with readers, but I’m sorry, not everyone’s book deserves to be published. Camille LaGuirre above stated that I was thinking like a “young writer” and I respectfully disagree–I’m thinking like a writer who is early in his career but who has paid his dues and is driven to improve his craft and become a great writer. Part of becoming a well-known, great writer over the last few decades has been paying your dues, improving your craft, and building the connections to get past the gatekeepers of the book publishing world. Difficult, yes, but what career is easy? Now, though, the market is saturated with too many books and it’s even harder to have a breakthrough book.
All in all, I believe traditional publishers still provide the best books to be had. I’m all for helping the industry finally get into the 21st Century, lower prices, and share their profits more equitably with authors, but blindly trusting Amazon to take the reins and letting them snuff out the old guard is a good way to make sure the market becomes even more saturated make it impossible for anyone but the biggest name writers to make a living.
Yippee, a car analogy. If a plot hole in a badly-written book could kill you, then maybe you’d have a point…
I agree that there needs to be some sort of filtering mechanism – new books are being published faster than anyone could hope to read them, even if they spent all their waking hours reading. I’m not convinced that Amazon or any other ebook retailer has any incentive to provide that mechanism, beyond the tools they give you already.
With paper books, you’re limited by the available space in bookshops, so it makes sense to publish what you think is most likely to sell well. With ebooks, shelf space is effectively unlimited – my desktop PC could store a copy of every book that’s available for the Kindle and still have room to spare. If Amazon were to try to filter out the bad self-published books, that would just eat into their profit margins.
If you think Amazon don’t do a good enough job of letting the good stuff rise to the top, there’s an opportunity to set up a recommendation service to pick out what you think are the best… though you’d be competing with Goodreads and the thousands of book bloggers who’ve already had the same idea…
I do a lot of freelance editing for writers, and let me tell you I’ve run across some plot holes that have very nearly killed me.
I understand your argument about quality, and I can see why people put this out there, but I respectfully must agree to disagree with you on this.
A book being published does not make it any better quality than a self-published book. I’ve seen plenty of dreck in both sides, and that will never change, because 1) yes, there will always be poor writers and poorer copyeditors/editors (and this includes so-called professionals, not just self-pubbers), but 2) for those that are written ‘well enough’, it’s entirely subjective as to who will find which stories appealing.
And it’s not like we can’t peruse the first chapter in a book online to see if we even want to buy it. There’s no reason for me to purchase a book and be shocked by the poor quality of a first chapter.
Also, I don’t think the point is blindly trusting Amazon. A few days reading on this site will show quite a few comments on how some things are good with Amazon now, but they’ll change as well. And possibly not for the better. No one knows.
Regardless of what should be right, and what is right, sales do show a marked increase in working the online market for sales. Where the sales go is where we the writers will have to follow to set our books out. And maybe it’s not fair, and it’s really hard, but so what? In the writing business, it’s always hard.
I think it’d be nice to get some more solid numbers on sales from everyone, big publishers and online stores alike, to understand how the market has fluctuated. It’d be nice to see some transparency from EVERYONE. After all, this is supposed to be our businesses, so why aren’t we allowed to see the figures?
Pretty much this. While there are a ton of poor indie and self pubbed books out there, and we as a group have brought a lot of the criticism on ourselves, there are now more choices for the readers too. And some books from no-names are quite goood. There are even a number of books ou there by well-known authors that never saw the light of day in traditional publishing.
Readers are playing catch up too. They are discovering sample chapters. They are discovering good blogs that match the genres they like. They are finding gold nuggets in the mud that is indie and self publishing.
I always like choice. That’s my default opinion when I maybe do not understand every aspect of an issue. I see tons of choices out there and it gives me hope for all involved.
How to get noticed now? Answer that and you can make millions just by charging other people for the answer
. There is no one answer but, again, many different paths to choose from.
Respecfully, the filter system was broken before. It is still broken. But now, there is more than one option and people can get around the filter.
Splitter
Agreed that authors need to do what’s in their best interest in order to survive and that more apparency from publishers and retailers alike would be nice. I’m not a member of the Authors Guild and have no reason to stand up for Turow’s opinion, other than I just didn’t read it as him being a total shill for the old guard.
I am a member of the National Writers Union (which very much does stand up for writers–everything from legal consulting on contracts and royalty disputes to providing affordable health insurance plans for self-employed writers [which has saved my ass!]), and they’ve recently done a poll of all members to see what our e-book contracts look like. The results aren’t out yet, but the preliminary word is that the big NY publishers definitely are screwing writers the most with e-book contracts, either by paying the lowest royalties or by keeping authors completely in the dark. There’s no question, this is a problem. It makes no sense for traditional publishers to take so much money when there are no production and distribution costs like with print books…
And rereading all of the comments here, I realize I’ve clouded my points by speaking of e-books and print books in the same breath. Really my concern is with keeping an infrastructure for print books to get to bookstores. Kindles, and Nooks, and iPads are cool, and the e-book market is doing just fine, but I still like to read from a paper book. I really like bookstores–used book stores, indy book stores, and yes, even the antiseptic Barnes & Noble megastores (and Borders before they went tits up). There is a huge market of people who feel the same, and this is the market where traditional publishers provide new content (for better or worse). As a writer, I expect to take a smaller cut to see my book in one of these stores because of the production and distribution costs, paying the middle-men, etc., and I’m okay with that. My fear is that if traditional publishers keep losing their asses in the e-book market, the entire infrastructure is going to come crashing and what we’ll be able to find in print at stores will be even more limited.
In a perfect world, the big publishers would get their heads out of their asses and incorporate new technology and adapt in a logical way to be more streamlined, smaller independent presses would get more shelf space in stores, and hell, why not a POD kiosk in a book store, so you can browse through the thousands of titles from self-published authors and indy presses and be able to print your book right there on the spot.
That’s a perfect world, though, and I don’t trust Amazon or the big NY publishers to get it right. They’re both out to make money, not to serve the best interests of authors and readers.
Well, as you point out, there have always been good books and bad books published. Yes, now anyone with the ability to write something, no matter how good it is, can get published whereas before it required, usually, having some skills, work, and a whole lot of luck in many cases.
But readers have always had filters. Even before the ebook and self-publishing revolution, readers had to use methods to filter their reading selection, because there was so much to read they couldn’t read it all. Likewise, only about 20% of a publisher’s book list made money, which to some degree or another indicates that the reading public wasn’t impressed with the bulk of what was being published. IOW, you had a lot of stuff you didn’t want to read prior to that.
But the publishing process isn’t the only filter used to weed out reading the good stuff, and really restricted getting the opportunity to read the good stuff out there that couldn’t get published, for whatever reason.
So I would suggest it isn’t much harder through all the “noise” that has always been there to get discovered. That has always been hard, and actually it isn’t any harder than before. You simply write enough to get noticed.
Anyway, I have an article on Grasping for the Wind’s website coming up talking about this very topic on the 16th. Plus, this point gets off the topic at hand. The point being, there is a lot more new authors to be discovered and they are. I personally am glad for the opportunity and work to write the best stories I can. I don’t think I would have even had such an opportunity with the books I’m writing several years ago. But most who have read my books enjoy them.
Agreed, making a living at writing has always been hard, and it’s not any easier with the burgeoning online market, just different. I’ll be sure to take a look at your blog post on Grasping for the Wind.
I’ve had 15 books published by Big 6 publishers and I will wear a red dress and dance on their graves when they die.
@ Garret Calcaterra.
Quote “In a perfect world, the big publishers would get their heads out of their asses and incorporate new technology and adapt in a logical way to be more streamlined, smaller independent presses would get more shelf space in stores, and hell, why not a POD kiosk in a book store, so you can browse through the thousands of titles from self-published authors and indy presses and be able to print your book right there on the spot.”
Without Amazon there is no reason for the big publishers to change.
I don’t trust Amazon either. I don’t trust any big business for that matter. But while my interests (getting a better deal for my writing) and their interests (building market share by giving writers a better deal) coincide, then I’d be stupid not to use them when the time comes.
Why waste my time trying to get onto a failing model, which might not like my work because it falls slightly outside what they think will sell, when I can self-publish it (via a writer’s collective of people I trust) onto Amazon properly copy-edited by professional editors, with a cover by a professional illustrator, and a marketing/promotion plan devised by a group of forward thinking creative types.
Publishing won’t die, big publishing won’t die, but they really do need to get their act together. Bookshops however, at least in Britain, have been dying since the ‘Net Book Agreement’ was taken away back in the ’90s. Once big companies can discount book prices the little guys get destroyed. I don’t like it –I don’t like supermarkets undercutting bakers, butchers, and greengrocers either — but there is little anyone can do to stop it.
But if Amazon start acting towards their suppliers (writers) the way supermarkets act towards farmers, then I’ll go looking for another main line to the readers. I suspect farmers will too when the disruptive nature of the internet gets into the food business in a big way.
Ah yes, the tsunami of crap argument. That New York must protect us from all this dreck that self-published authors are sure to put out (the same dreck, I might add, that New York is trying to snap up left and right to put it out in print form). Joe Konrath already addressed this “fear” –
http://jakonrath.blogspot.com/2011/07/tsunami-of-crap.html
And as he’s repeatedly pointed out – somehow people manage to find entertaining/funny/whatever videos on YouTube that they want to watch, despite the tsunami of crap videos constantly uploaded. People will find what they want. Cream will rise to the top.
traditional publishers still offer the best way to distribute our books and reach out to new readers
I respectfully suggest that you re-consider that bit. My wife is a Big6 author, and we are close friends with several more authors on both sides of this. (both successful indies and legacy pub’d). My wife is making out better via KDP than via NYC, but since you might consider her at an advantage due to her legacy pub’d status (we certainly don’t, but some might), let’s focus on her indie-only friends. From what we know of their experiences, there is simply no comparison. The indies are making out better, getting noticed easily, becoming wealthy, even. The legacy pub’d are, without exception, really feeling the squeeze, even a hard-working NYT bestseller on the verge of bankruptcy despite living frugally and spending all her time on the misguided tasks her publishers keep throwing at her. The trouble is not coming from Amazon. It is coming from the incompetence of the Big6 and the fact that they for the most part are no good at their jobs. Watching Amazon operate next to them is striking. Amazon doesn’t need to sell anything at a loss to be able to make more money for writers. Amazon is just so much much more logical and efficient at everything that it is almost unbelievable. If you are a Big6 typesetter, yeah, maybe you should worry. If you are a writer, it is the best time to be you. Seriously.
Besides, the KDP books are not being sold at a loss except in rare cases. You are quite right that 70% royalties might not last, if that is what you mean by homeymoon. But they can fall a long way before they hit the legacy levels, and even if they were to fall to legacy levels, the indie and KDP experience for us and our friends has been much preferable to the Big6 experience. It is hard to describe the difference if you have not experienced both worlds. It may sound hard to believe, but honestly the amount of time freed up by not dealing with the Big6 should be enough to allow you to handle whatever additional roles you need to take on, and the lack of stress and corporate stupidity is so refreshing (*individuals* in the Big6 will be missed, however, but who knows–maybe you can hire them for your projects in a few years when they are no longer with the Big6).
The legacy publishers will never care about your work as much as you do. Nobody will. Not Amazon, either, of course. But with Amazon and other indie avenues, you have enough control to get the results that you want. And you can tweak your cover / blurb / price until you find what works for your book. Try doing that with a legacy publisher. They try once (or not) and then they are on to the next thing. With KDP, though, we have not had to exercise that control much at all. My wife even switched genres (not much overlap at all) and we watched in amazement as the Amazon algorithms quickly sent new readers her way. We really did not do much at all to market. We spent no money and very little time.
An interesting case… We put up an old manuscript from her early days that she had not found a NY buyer for. She would acknowledge it is not her best work. She almost did not let me publish it. We did not tell a soul we had put it on KDP. Not even friends and family. WIthin *12 hours*, it had achieved a better sales velocity than any of her Big6 ebooks had ever achieved at any time. I don’t even think it was fully integrated into the Amazon search features by then. Oh, and we made twice as much per unit sold. And people seem to like paying a reasonable price for an indie book–each KDP book generates more fan mail than all her Big6 books combined and has a higher average rating. And these are not her strongest books in our opinion. The lesson I took away from that was that the Big 6 offers little to most authors except a tax on their success and a hindrance to their professional and artistic freedom. They really need to adapt or get out of the way. Maybe Google or Apple or someone else will offer an alternative to Amazon. Competition would be great. But the Big6 don’t look like that competition to me.
I love the comments on this blog. Thank you, anonymous, whoever you are.
Anon here again. You are quite welcome for that small contribution; I am glad if you got something from it. We have benefited greatly from this blog and its comments ourselves. The Passive Voice is one of the best. Thanks to P.G. and all commenters for making it so. After reading this blog and groklaw.net, I am really beginning to like legal blogs for the clarity of thinking and the level of civility in the communities that seem to form around them. A rare thing on the internet, but beautiful. And I am not overstating things if I say that these two blogs have greatly increased my faith in humanity and reduced my cynicism.
It’s a good issue to disagree on and discuss. In all honesty, I’ve had little experience with big publishing houses, so I have no reason to be pissed with them, but at the same time, while Amazon is an easy avenue for readers to buy the books I have had published with small presses, Amazon DOES force my publishers to sell at a discounted rate and my royalties are much lower than compared to sales at B&N, Smashwords, etc.
I agree that for many people, having a Kindle leads to buying more books and being more adventurous with new authors, but there’s still a huge market that isn’t so technologically savvy, and they don’t benefit from Amazon’s clout and lower prices (nor do the writers of the books that audience buys). The reason Amazon is the new bogeyman is because they’re king-shit right now and they’re bullying the old power-holders–not necessarily a bad thing, but I guess my problem is with the federal government jumping into the game and taking sides against the old publishing industry, which is already punch-drunk and reeling. I think we all benefit, readers and writers alike, if there are numerous avenues for publishing and buying books.
Right. I need to learn to reload the page before typing longwinded replies like that. Sorry. But if I may just add yet one more thing, unless I misunderstand, the reason that your are getting these lower royalties is that you are going through a publisher. You don’t need to any longer. You can have 35 to 70% by going it alone. That is the efficient way to do this, and the money you make should reflect that fact. And the gov’t is not taking any side here except the side of the law. The Big6 may be reeling, but they do not get a free pass to break the law so blatantly (in my totally non-lawyerly layperson’s opinion).
I don’t think it is a matter of the government taking sides. They are investigating and dealing with potential illegal activity of the publishers and Apple, violating the anti-trust laws. If Amazon was in on it, they would be included in the lawsuit as well. As I understand it, Random House is not included, because it waited over a year before instituting the agency model when it didn’t feel it had any choice.
The publishers and one retailer, Apple, in the suit have done this to themselves. They have no one else to blame.
I don’t think this case is about about publishing; this is about Apple. Apple went from a distant last place computer manufacturer, whose bankruptcy was likely, to one of the largest companies in the world in 15 years. Apple’s predatory, monopolistic practices are well known. I expect DOJ to get the publishers to roll over, then go after the music companies, Jobs relationship with Disney and Google, the Patent lawsuits, etc. etc.
Yeah, the legal details of all this are a bit beyond me. My only concern is that the book publishing industry comes up with some sort of system to be profitable selling e-books (and pay writers fairly), so they can stay solvent enough to continue to print and distribute traditional print books.
“Apple’s predatory, monopolistic practices are well known”
What parallel universe do you occupy ?
Apple likes to enforce its patents, but those are legal, limited-duration monopolies on things; it may be a bit more touchy about those than some, but it got burned long ago when something in a contract with Microsoft gave Microsoft access to Apple IP that Apple hadn’t intended to license. I believe Windows arose from that, if I’m not mistaken? (I could be; I’d have to double-check with the spouse, who kept up with that more than I.)
Once burned, twice shy.
Of course, Apple did once strong-arm the music industry into accepting the .99 per song price, which wound up disrupting the whole cash-cow of “a handful of ‘eh’ songs and one hit for $16.99″ CD market… I suppose that’s predatory and monopolistic from the music industry’s point of view. I’m sure they’d like to return to the days of music gatekeepers and music contracts and… Wait, wait, haven’t we heard this refrain before?
With respect I think it is a bizarre thing to call a business monopolistic when they actually enforce their own patents. Without IP law there would be no writing. Copyright is all about monopolies over a work for a length of time. Have a look at the current round robin of IP law suits and you will find quite a collection. Imagining that Apple is in any way monopolistic is quite an astonishing stretch.
Also how can a company ‘force’ the Music world to let it sell it’s songs for 99c against it’s will, when music was already on sale all over the world in every music shop, be called predatory. The Music industry proceeded to make more profits from Apple sales than the rest of the retail channel world wide.
Bizarre.
Yes, exactly. In the truth of the matter, they do have a monopoly on their patents — exactly as the law was intended to give them. In exchange for putting their work into the public record, so it cannot be lost forever if some key master dies, they get a limited duration monopoly on their patent, so they don’t have to worry about some other master grabbing their idea and profiting from it without recompense for their work.
It is not, therefore, monopolistic practices to enforce their patents — even if pedantically a patent is a legal, temporary monopoly.
From what I recall of the iTunes thing, the music companies were terribly annoyed by the whole “no, you can’t price the hottest stuff higher than the non-sellers; it’s all 99c” rule. Yeah, they made more in the long run, but oh, they screamed bloody murder for a while because the only way to get on iTunes was to abide by the price. (Eventually they got some compromise; they provided DRM-free music and they could charge… $1.29 or something?)
Authors should do whatever maximizes both their profits-from-writing and their job satisfaction. All arguments on the subject, from an organization claiming to be the “Authors Guild”, should not focus on anything but the profit and job satisfaction of authors.
Book sales were in a major decline long before Amazon brought out the Kindle and before Amazon made it easy for self-publishers. People keep forgetting that. What publishers and the media ignored then was the sheer size of the secondary market for books–used book stores and online sales. Publishers would rather say, Well, people just don’t read, and then jack up the prices and further curtail the selection. They were driving would-be book buyers to the internet, the movie theaters, the gaming consoles, the library, online shopping, used book stores.
New book sales kept declining. There was a huge demand and publishers were not meeting it. Publishers kept saying, People just don’t read. Brick-and-mortar stores treated books like produce with a very short shelf-life.
The “too many books out there” argument is an absurd argument. It’s not as if any innocent buyer opens a door and releases an avalanche of books that will smother him to death.
The publisher as “gatekeeper” is less absurd, but it’s more wishful thinking. The publishers keep proving they have no idea what it is readers (outside their teeny tiny circles) want. They are so far removed from the demand side of the equation they are consistently surprised by any success and quick to blame others for failures.
If the publishers were doing their job and satisfying readers, self-publishers wouldn’t stand a chance. Readers would turn up their noses. Only they aren’t turning up their noses, are they? Readers are buying more books than ever before.
I guess in all fairness we need to blame Amazon for that last bit, too.
The big 6 have failed miserably to market their product. They have failed miserably to respond to the digital world despite being warned about it many years ago. They have learned nothing from the experience of the music and film industries.
When Amazon started to sell books, the big 6 did nothing. When Amazon started to sell eBooks, the big 6 did nothing. They could have launched their own online stores but didn’t have the cop on or the guts or the where with all to do so.
When Apple looked at the eBook market and basically misread the market, they approached the big 6 and of course the big 6 jumped at an opportunity where they didn’t have to do anything except fix their own prices.
What a track record.
For me the demise of the bookstore cannot come too soon. I find them boring wastes of space. Looking for stuff to read in stores where the owner and his distributors chose what books I am allowed to see and what books they chose to promote to make the most money.
I shop online where I have enormous choice. I can consult with other like minded readers. I can buy them cheaper and avoid having to spend more money to travel to a store. It is fantastic.
I never ever spend more than about 6 dollars on a title. I have been reading for 45 years and a title in the best seller list is no more a guaranteed of the quality of a piece of reading than one from Indie publishers. The self publishing explosion has been a revelation to me. I, like many others, have now discovered that being chosen by a publisher is absolutely no guarantee of quality whatsoever. It only reflects the taste of some random publisher who bases their choice on all kinds of commercial bases, and mostly has little to do with actual quality.
Howard, Amazon is great for readers just like you (and I too am glad for the variety of books available at the click of a button), but wishing for the demise of bookstores is silly. It does no one any good–not readers or writers. There is still a huge market that prefers to buy books the traditional way and killing off bookstores completely disenfranchises them. I’m not saying bookstores are perfect or that they can’t be improved, but they have a lot to offer. Sure a B&N store isn’t perhaps as good as huge used book store, or a fantastic library, but start killing off the bookstores and what’s next?
Well they don’t have long to live anyway. I respect your valuing of them but they’re not worth it imho.
When print-runs across the board start being lowered drastically except for best sellers, and the resulting price increases start to bite, margins in bookstores will really start to strangle bookstores and their demise will follow shortly after.
I do however see a future for a small number of bookstores who adapt and put POD at the heart of their shop. I agree that there will be quite a long tail of paper fetishists, and the only way to satisfy them at an affordable price will be POD.
Nice, I like the term “paper fetishists.” Might have to steal that. It seems to me there’s plenty of room for both print and e-books to exist. If the publishing industry can adopt some new technology finally, things like POD kiosks and smaller printing runs from localized printers, we could have the best of both worlds.
Garrett:
The thing is, for those of us who have been in this business a while, and watched what the current industry did to the entire culture of publishing and bookselling…. we’re glad that it’s over.
Seriously, Turow is mourning something that’s already gone. Bookselling and publishing are mere shadows of what they were just a few decades earlier. And the companies who struggling to stay in business now are largely (not entirely) the ones who were at fault for destroying it.
What’s being destroyed is a sham, and though we are all sorry for those individuals who are caught in it’s destruction, we’re just plain NOT sorry to see the skeleton of what we loved collapse so we can build anew.
@Stephen
I hear you. Amazon and the online explosion of book sales has forced the old guard’s hand and that’s a good thing. But I feel like people are missing Scott Turow’s main point here: that the DOJ’s involvement now might be the crippling blow to big publishers who were just maybe starting to figure things out. If that is indeed the case–and Turow is clear about this–then the irony of the whole thing is that the government will have stepped in to break up monopolistic practices only to hand over the keys to Amazon as the new monopoly in the publishing world.
In the immortal words of The Who, “The new boss is the same as the old boss.” People are cheering the demise of the old guard to their own detriment. Do we really think Amazon will be so accommodating if they manage to get a strangle-hold on the market? I’m doubtful.
A healthy Amazon and a healthy traditional publishing industry is the best case scenario for readers and writers alike. The two giants will keep each other honest. That’s Turow’s main point–no one in the DOJ thinks to actually ask writers, or readers for that matter, what the best way to handle all this is. Admittedly, the regulation of monopolistic practices is beyond my area of expertise, but I can’t help but feel that it’s big business practices and politics as usual.
@Garrett,
If that is indeed the case–and Turow is clear about this–then the irony of the whole thing is that the government will have stepped in to break up monopolistic practices only to hand over the keys to Amazon as the new monopoly in the publishing world.
So what happens in the “break up” people seem to be worried about? The publishers (and Apple) being investigated are already separate companies, correct? Theoretically (allegedly) “acting together.” Probably they get nothing more their wrists slapped and told, “Naughty, naughty, don’t do it again.” Maybe there’ll be fines levied. It’s not like each publisher is going to be told to cease business totally, leaving Amazon alone to take over the world.
JEH
I don’t claim to know all that Scott intended with his article, but I will say this. Will some businesses close through this transition? Yes. Will some publishers go out of business? Yes. (Their contracts for rent, investment in old-style printing presses, etc., make it hard for them to adjust financially.) Will some publishers adapt and survive? Yes. Will print books continue to be published and sold? Yes. For the foreseeable future. Will there continue to be bookstores? Yes.
The bottom line, is when technology or cultural changes require a business to adapt and change, some make it and some don’t. And in place of the ones who fail, new businesses built on a more workable model rise up to replace them. So, yes, some of the publishers will go out of business. But that does not mean print books will go away. Yes, some more mega-bookstores like B&N may go belly up. But that doesn’t mean bookstores will totally go away. They will simply have a different business model more centered around POD.
What the legacy publishers are doing is they are financially trapped in many cases and can’t get out of contracts, employee salaries, retirement commitments, expensive NYC office and warehouse space, etc., and are using various tactics to delay the inevitable, in hopes they can last long enough until they can change and adapt. Most of them got caught with their pants down and are struggling to figure out a way to shift gears without falling apart from the inertia.
But it will happen. They can’t stop it. No more than many scribes couldn’t stop being put out of business when the printing press was invented.
Garrett:
The problem here is that Amazon is not in the same business as the publishers and other booksellers. They aren’t the competition here, and whether they exist or not has no bearing on whether Amazon has a monopoly or acts like a monopoly.
This is a new paradigm. Amazon is (and sees itself as) a search company and aggregator. Their main competitor is Google.
And for this reason we must remember that Amazon is not really an enemy of the old guard either. They’re not trying to put them out of business.
The problem is that the old guard is used to having things their own way. They’re used to forcing others to work their way, and they’ve build a business model based on that. Well, that business model is over. And you can’t save it by breaking the law.
Amazon isn’t playing hard ball with these losers — they are just refusing to go along with their dysfunction. Apple saw that dysfunction as a way to leverage content for the launch of the iBookstore. Just something temporary.
Now, here’s the big thing: whether the publishers fail or not depends on them, and only them. It’s like a drunk falling and falling. Being nice and not holding them accountable isn’t going to help. Maybe this investigation will kick them out of denial and make them pull it together.
But the publishing industry will never ever ever be healthy until they stop seeing Amazon as a competitor and stop treating them like an enemy. Amazon is a market. They have to work with that market, and work within that paradigm to succeed in that market.
They can develop other markets.
And here’s the thing — the note of hope — if they are doing a job that is as important as you believe, NEW publishers who “get it” will take their place. Small players will rise, old fogeys will fall.
Thanks, everyone. This has been a highly informative discussion, and I’m not sure I have much more to add to the conversation, but I’ll throw out this last bit of food for thought in response to the most recent posts. There is more than one type of monopoly. Yes, Amazon was originally only a market for selling books, but the moment they started signing contracts with writers and publishing books they became a publisher. Already we’ve seen them use their clout to try to corner the e-book reader market by selling Kindles at a loss. Already we’ve seen them bully traditional publishers into selling new release e-books at a massively discounted rate (which sticks it to the publishers, yes, but also to the authors). Already we’ve seen them force small presses to sell books at a highly discounted rate. Already we’ve seen them try to force authors and publishers to sign contracts that gives exclusive distribution rights to Amazon. Already they’ve threatened, and followed through, with removing books from their website when publishers didn’t acquiesce to their pricing scheme.
The pattern is clear: they are using their selling clout to tap into all parts of the supply chain. If Amazon is allowed to run roughshod over the book selling market without check, they very realistically could have themselves a vertical monopoly, and then what? Do we as writers and readers really think they will be so accommodating with low retail prices and high royalties if they have the market cornered?
@Garrett
There is more than one type of monopoly.
I see Amazon as “the big guys” but nowhere near a monopoly. Someone else, don’t remember who or even if it was PG’s blog or not, said that Amazon’s 60% of the market is still 40% short of a monopoly. They’re just the biggest, right now. If they goof and do something wrong, someone else will take over.
It’s just business, and this e-book sector of it is so young that the “old guys” are floundering, not knowing how to compete in it.
This sort of thing happens in all businesses, not just in publishing. Grocery stores and department stores, large and small, sell loss leaders all the time to attract customers and hope to make up for it in sales of other items. The bigger ones sell “house brands,” the equivalent of Amazon’s publishing arm. Even the small stores change products they sell at least once in a while, refusing to carry a specific product, if not even a whole brand or line. They just can’t leverage price like the bigger guys. Those that can, do it. Safeway, Kroger, K-Mart, Walmart, etc.
The suppliers do not *have* to deal with the big box guys, either, though they might think so because they’re such large customers. They sometimes fight back, sometimes maybe illegally.
It’s just business.
JEH
I am going to disrespectfully disagree. I don’t disrespect you as a person, but the ideas you have are nonsense.
Do you understand what “corner the market” means? Traditionally, it meant buying up enough futures contracts on a commodity (or the actual commodity though this much harder) at a low price that you can control supply and force the price up. I think you are trying to accuse Amazon of predatory pricing by selling Kindles below cost. This too is nonsense. Just about every company that sells hardware and the software that requires that hardware has a huge incentive to sell the hardware below cost. It is a perfectly reasonable business decision. Just ask the game console makers (Microsoft, Sony, and Nintendo). They all do the same thing. This is a practice at least as old as safety razors (give away the razors so you can sell the blades).
No, that’s just not true. Before the agency pricing collusion, Amazon paid the publisher the same wholesale price, no matter what Amazon charged. The publishers were making more money per copy sold (and almost certainly selling more copies because Amazon discounted the biggest selling titles). How that scheme affected authors would depend on the contract each author had with their publisher. I’m sure folks here know what the standard contract was.
Again, not true. Amazon can’t force a small press to change its prices. It can choose not to carry titles, but that is a business decision that every retailer has a right to make.
What is your definition of “force”? Amazon has one program that I know of (KDP Select) that offers a range of benefits to indie authors in return for temporary exclusivity. Authors are free to choose whether or not to participate. Amazon has tried to get the books from its publishing imprints into other venues, but the other players in the industry have largely refused.
Um, so? They choose not to work with certain suppliers based on attempts to negotiate terms. What business doesn’t do that? Does Amazon play hardball? Absolutely. So are all the other players in the industry.
You seem convinced that Amazon has a plan to obtain a vertical monopoly in book publishing by using predatory pricing to remove competitors. There is one serious problem with that theory when it comes to ebooks. It is impossible. The marginal cost to distribute an ebook is pretty close to zero and the barriers to entry are quite literally non-existant. If Amazon were to raise prices (or lower royalty rates) beyond what is economically competitive there would be absolutely nothing stopping you or me or anyone else from offering a competitive service. There is simply no way for a company to do what you seem to fear. I would say that if Amazon is currently overpaying royalty rates to KDP authors, those rates may come down in the future. But it won’t be because Amazon attains a monopoly.
William – an excellent and comprehensive post.
Agreed. Good job, William.
Garret:
They only started signing authors to books because they couldn’t get what they needed from publishers.
It’s a tiny part of their business and not a particularly profitable one. Amazon’s model is to have as many suppliers as possible, in as many forms as possible. Have you ever searched for something that third party sellers have? Like, say, computer cable, or a charging unit? They have multiple providers for that product, each with different prices and shipping options. Some of them are selling things like cables for Amazon’s Kindle — you know, in competition with Amazon?
To Amazon, their publishing arm is like their user forums, or Listopia — just one more way, out of many, to see to it that the customer always finds exactly what they want at Amazon.
Which IS the thing about Amazon that Publishers and people form publishing don’t get. Amazon doesn’t care if there is only one customer in the world for a product — they still want that product to be available on Amazon.
THAT is the business Amazon is in — users finding exactly what they want — and they will get into whatever sideline will make that happen. They’d just as soon others do the supplying, but they’ll do it themselves if they have to.
The thing is, if Amazon become a monopoly and used that position to force consumers and suppliers to do anything, then they will fall foul of the same antitrust laws being brought to bear on Apple and Big publishers.
Amazon ‘needs’ competition. The moment it’s dominance becomes a monopoly they will lose the competitive edge that makes them dominant. Then somebody else will start up another internet company that simply sells e-books at a fair price to supplier and consumer while leaving Amazon to act as a distributor for the more cost-heavy printed books.
I suspect HTML5 might well become the de-facto standard for e-book formats in the near to mid-future. Once that is sorted the format wars will be over and it won’t matter what device you read the book on, which is the way it should be.
All in my humble opinion of course and I may well be wrong about HTML5, but ebooks are more like web-pages than they are printed books.
Yes, I know Amazon doesn’t, and in likelihood will never be able to have a true monopoly. Mr. Copple here has the right of it, I think. The landscape is changing and that’ll mean the demise of much of the old guard, but the birth of new businesses and business models to fill in the void and we’ll all be fine.
My point here–and Mr. Ockham, I apologize for my imprecise terminology when talking markets, monopolies, etc.–was not to lay out a legal case against Amazon, but rather to show you many of the similar characteristics Amazon has with the old publishing system. Even the Big 6 did not have a monopoly, yet everyone is grabbing up their pitch forks and gleefully dragging them off to the gallows.
Amazon very much is a publisher now, as well as a market place, and they are using their clout to become the dominate book seller, which is to my mind will result in nothing better than when the Big 6 was the dominate book seller. They’re trying to control how and where books are sold so that they make their profit at every turn. (Is this any different than other industries? Of course not, but that’s why I refuse to shop at Walmart too.) And I’ll emphasize again, we can’t just focus on e-books. Print books are still a huge part of book sales and part of our literary culture. If we have a huge upheaval in the publishing industry, then what? Do we have to order every print book from Amazon until they finally start building some of their rumored Amazon brick and mortar stores?
I just feel like people are being short sighted on this. Cheering the death of the old industry because they screwed us badly is fine. But to then gladly jump into the arms of the new publishing power house when they’re already showing similar characteristics, and hoping all is going to be peachy keen seems unwise.
“But to then gladly jump into the arms of the new publishing power house when they’re already showing similar characteristics, and hoping all is going to be peachy keen seems unwise.”
1.) Um, they _aren’t_ actually showing the same characteristics at all. If you look at their business structure and how they make their cash, they fail and fail fast if they start doing what you fear. But that aside….
2.) Who’s jumping into the arms of a publishing powerhouse? It’s a market, one of many. And Amazon’s whole structure is based on enabling those other markets. Just like Google’s.
The key thing here is that the publishers are NOT offering an alternative. They are NOT providing a stop gap to Amazon’s power. They are NOT doing anything to help anybody, not even themselves. Their failure is completely irrelevant to Amazon’s power — and frankly, they could have saved themselves if they hadn’t decided to take Amazon on as an enemy.
If you fear Amazon’s power, you have to look at the whole picture. You have to actually understand what their power is. You can’t just pick and choose tiny aspects of that picture that are recognizable from the old paradigm.
Garrett wrote:
“Cheering the death of the old industry because they screwed us badly is fine. But to then gladly jump into the arms of the new publishing power house when they’re already showing similar characteristics, and hoping all is going to be peachy keen seems unwise.”
I do accept that you do have a point here. If the big 6 and a large number of existing publishers went under without others emerging, then you are correct – the new dominant player would be no different than the old dominant players.
However what people need to understand is that ALL businesses run their businesses like a business. It’s the old tortoise and scorpion story again. The legacy publishers have behaved the same or even worse than Amazon for decades without being called out on it. They have acted like an old boys cartel.
All readers and writers can hope for is that the traditional publishers can change their attitude and business model and get a grip on the reality of the new market, and that new players will emerge to produce a lively and competitive marketplace.
I believe there are huge opportunities out there for people with innovative ideas to upset Amazon’s applecart.
Found a coupe of new articles on all this business that shed some more light onto the issue
The first is an informative article detailing the provisions of publishers’ deal w/ Apple that are under fire:
http://www.washingtonpost.com/pick-your-monopoly-apple-or-amazon/2012/03/05/gIQA0kBB4R_story.html
The second is more of a projections about the ramifications of losing agency pricing:
http://www.idealog.com/blog/if-the-government-makes-agency-go-away
The prescient quote from the latter is this:
“Over time, the biggest losers here will be the authors. The independent authors will feel the pain first. Agency pricing creates a zone of pricing they can occupy without much competition from branded merchandise. When the known authors are only available at $9.99 and up, the fledgling at $0.99-$2.99 looks very attractive and worth a try. Ending agency will have the “desired” effect of bringing all ebook prices down. As the big book prices are reduced, the ability of the unknowns to use price as a discovery tool will diminish as well. In the short run, it will be the independent authors who will pay the biggest price of all.
“But, in the long run, all authors will just get less. They will join the legion of suppliers beholden to a retailer whose mission is to deliver the lowest possible price to the consumer.”
Shatzkin is a smart guy but he is completely wrong in this matter. Firstly there is absolutely no indication that Amazon would price leading titles at less than 9.99 dollars. Secondly I suggest that it is quite silly to say that readers will respond more to a difference of 11-14 dollars than they will to 5-8 dollars if they are basing their purchases on price. Both price differences are significant.
Independent self published authors are earning far more in terms of royalties now that they ever did from they ever did from the established publishers and more and more authors will be going this route.
Shatzkin’s assertions and those of others who make the same argument are trying to sell us a pup in trying to persuade us that price fixing and artificially inflated prices are good for anyone including authors.
The airlines used to try to sell that one to us many years ago and managed to succeed in doing so for far too long. We have wised up too much for that one anymore.
Garret, you quoted from the article: “But, in the long run, all authors will just get less. They will join the legion of suppliers beholden to a retailer whose mission is to deliver the lowest possible price to the consumer.”
I don’t get what they are saying here at all. Because if agency pricing is done away with totally (i.e., they don’t end up with some modified form of it), then we go back to the wholesale method which was in place to begin with.
That is, I as a “publisher” of my work, set the retail price. They buy that from me at a wholesale price, usually 45 to 55% discount off retail. So say I as an indie author, set the retail price of my book at $6.00 and the discount if 50%. So they buy it from me for $3.00, and that is the money I get for the book. Not having anyone else to pay or massive overhead and inventory, that is all my $3.00. Then let’s say Amazon discounts the book to sell at $2.49. They are taking a $0.51 cent loss on the book, because they are still paying me $3.00 for the book, no matter what price they sell it for!
It was the same way with the $9.99 deal with the publishers before agency pricing was put into effect. Amazon paid a set price to the publisher no matter what Amazon decided to sell it for. They might be paying the publishers $11 or $12 for each ebook, but selling them at $9.99. But there is no way Amazon would discount it down close to what I’m able to sell my books for. They might figure they can afford to take a dollar or two hit for each ebook as a loss leader, but not seven to nine dollars a hit.
So, discounting by Amazon doesn’t hurt the author because:
1. It doesn’t mean they are going to pay me any less than they would otherwise, just because they sell my book at a discount. They take the loss, not me.
2. There is no way they can discount a legacy publisher’s book as low as my prices for any sustained amount of time because it would be too great a loss. Sure, the difference gets narrowed, but my $5.99 book still looks very good against a $9.99 book, if people trust me to deliver a good story.
But, the other side of the coin is price only factors into it on occasion. More when the author is unknown, or it simply gets too high for people to stomach. But if you love an author, and to get their ebook you pay $12.00, and you really want it, you’ll pay the $12.00 instead of go find someone at $2.99 you want to give a try. The reverse is even truer. If people like you, then the fact your book is selling for $2.99 is just icing on the cake. But if they want your book, they aren’t going to go find a different book selling for $9.99 because “Wow, that’s a great deal for a book put out by a traditional publisher!”
In short, Amazon’s ability to “deliver the lowest price to customers” is dependent upon what I set the “wholesale” price at for my book. The higher I set it, the more they have to sell it to make a profit, and the less they can discount it to a really low price even to take a loss.
I don’t see how this affects my ability to make money. Indeed, when they discount it, more of my books should sell, and I’ll make more money, not less. Their math doesn’t add up.
The thing is, Garrett, the major publishers are in an untenable position right now. The way they are structured, the cannot compete with indies on ebook prices. Where moderate sales of a $2.99 ebook can earn a comfortable living for a self-publisher, those same moderate sales at that price will drive a Big 6 publisher into bankruptcy. Most books have only moderate sales and very low profit margins. The Big 6 are dependent on blockbusters. Print blockbusters. We’re not talking greed here, we’re talking survival. Let’s say that the Big 6 decide today that they will price all their ebooks at $2.99. Will that hurt indies? Sure. In the short run. In the long run it will drive more people to ereaders and ebooks, while the publishers will take a loss on every ebook sold. They’d go out of business long before indies decide they can’t compete.
However — publishers are making a lot more money on ebooks than they whined they would.
They could survive, and do even better than they’ve been doing, if they had the cultural ability to do it.
However, I’m thinking that the publishers who survive will mostly go in one of two directions: the biggies will be absorbed back into their entertainment-giant parent companies. They won’t publish books, but rather they’ll acquire options on existing books and make movies and games and do merchandising. They’ll be the consumers of subsidiary rights.
The other direction is out there already, but in its infancy: the aggregators. Those business will be all over the map (some like Huffpo, some more like Smashwords, some like Blogger) but their main business will be acquiring a platform. That is, they’ll have the audience, and a brand, and therefore have something to offer the author who uses them.
Hmmmm. I think I’ll do post expanding on this for my next Tuesday business post next week….