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How the Amazon-Hachette Fight Could Shape the Future of Ideas

29 May 2014

From The Atlantic:

Over the past several months, what started as a quiet trade dispute has intensified and become public as the largest bookseller in the world, Amazon, and one of the biggest publishers, Hachette, battle over their next contract.

. . . .

Why? A contract negotiation between a supplier and a retailer rarely makes it into the press, and the specifics of this one—e-book discounting and Hachette’s profit margin—are no more interesting or significant than many others that garner far less attention. But in this case, it’s not the price of flat-screen televisions or how they’re displayed in stores that’s at stake—it’s the future of ideas in America.

. . . .

By some estimates, today Amazon controls around 50 percent of all book sales—physical and electronic—in the U.S. In the past decade, the company has steadily grown that market share, taking it from Barnes & Noble (shrinking), Borders (bankrupt since 2011), and independent bookstores (around 2,000 remain today out of the nearly 7,000 there were in the mid-1990s). It also built most of the e-book business in the U.S. following the successful launch of the Kindle e-reader in 2007. It wasn’t the first e-reader on the market, but by allowing customers to download e-books over a private, customized network built for the purpose, as opposed to making them connect their e-readers to a desktop or laptop computer connected to the Internet, it quickly became the most popular. In 2010, Amazon was estimated to control 90 percent of the growing e-book business. That’s when Apple, with the support of five of the world’s six largest publishers, launched iBooks, a main feature on its brand new iPad. Within two years, Amazon’s market share in the now much larger e-book business was thought to dip to around 65 percent, with Apple at around 10 percent and Barnes & Noble’s Nook business, launched in 2009, at about 25 percent.

. . . .

Fast-forward to 2014 and Hachette’s contract with Amazon is up again. It’s been nearly two years since Amazon regained control of the prices of many of the e-books it sells, and prices for best-selling e-books have plummeted, with Amazon leading the way when it comes to discounting; the consequences to its competitors have been predictable.

. . . .

Amazon is willing to go so far as to push customers to its competitors to win this battle. There are two major issues at play. The first is the price of books, particularly e-books. Amazon wants to continue to control it and to offer any discount it chooses to consumers; Hachette, on the other hand, likely wants to leave an opening for the possibility of going back to its previous pricing scheme in 2015. If it can set the prices across retailers, it can do a little to help protect its other trading partners, most importantly Apple and Barnes & Noble. Amazon, unlike Barnes & Noble, for instance, doesn’t need to make money on books to be profitable. It can theoretically lose money on each sale of an e-book if it makes up the difference when it sells a garden rake or a package of diapers. Trying to compete on e-book prices with Amazon has been a major factor in driving Sony and Kobo out of the U.S. e-book market.

The second issue in the negotiation is what’s known in the book publishing industry as “co-op.” It’s a form of marketing: Publishers pay retailers to ensure customers see their books in stores. For instance, when you see a cover of a book displayed on a bookstore shelf and not its spine, that’s no accident. A publisher paid for that special billing. Amazon wants Hachette to pay more for placement on its website. By paying a higher rate of co-op, Hachette would essentially be transferring some of its profit margin to Amazon.

Like nearly every business dispute, this one is about money.

But, ultimately, it’s about so much more than that.

. . . .

Think of book publishers like venture capital firms. They invest in individual titles in the form of advances and the sunk costs of editing, packaging and distributing a book. Most of those bets lose money. Some make a lot of money (for every Fifty Shades of Grey there are dozens of money-losing duds). It all evens out to an industry where a strong year is one where a publisher clears a 10 percent profit margin.

As more book sales flowed through Amazon, it would have even more direct control over what people read. The company would have little incentive, for instance, to surface books readers are less likely to buy. If The Hunger Games is all the rage, then the company is best served pushing that title toward its readers at the expense of other books. Or, much more nefariously, it could discourage readers from buying books with a point of view it doesn’t agree with.

Jeff Bezos, Amazon’s founder and CEO, and the company’s stockholders, have so far shown little or no bias toward political ideas or pushing one book over another for any reason but profitability, but that’s not to say that someday that won’t change.

. . . .

Shatzkin elaborated:

Amazon has so much control over what it surfaces. Even if Amazon doesn’t do anything overtly to prevent certain books from being published, they would have so much control over what you’re likely to see or buy, it’s not good for democracy.

Link to the rest at The Atlantic and thanks to Patricia for the tip.

Because who could be better for democracy than a small number of huge international media conglomerates controlling the future of ideas?

What could be better for democracy than an inbred group of gatekeepers who decide what appears in bookstores and what does not?

What could be better for democracy than contracts that control and restrict what authors are permitted to write?

PG submits that Amazon is far more egalitarian and pro-democratic than big corporate publishing is.

Want to write about your personal philosophy? Want to push the boundaries of the literary form?

Don’t go to New York. For all their pretense (read the entire Atlantic article), they’re cogs in a corporate world that’s cramped by convention and quarterly profit requirements, pretenders striking poses for one another.

This is the group that has presided over a long decline in American reading, questing for short-term gain by pushing book prices ever higher while paying authors less and less and transforming them from independent artists into anxiety-ridden grist for a soul-destroying mill.

Literature in the United States was doing just fine before the industrial literary era dawned, killing dozens of small publishers and thousands of independent bookstores.

Make no mistake about it, today’s traditional publishing establishment is the product of decades of consolidation, concentrating more and more power over what is published into fewer and fewer hands. The latest and largest example of this trend is the merger of Random House and Penguin to create the largest publisher in the world.

As independent authors arise, empowered by Amazon’s democratic commons of ideas, PG says we’re looking at a renaissance of American literature, an upheaval that is shoving the suits out and putting authors back in charge of the art they create.

Despite the dying spasms of Big Publishing, the wall between writers and readers is coming down. Uncontrolled and unmediated ideas are being released into the wild, giving readers the opportunity to decide which will flourish.

Whether the path out of corporate serfdom comes via Amazon or someone else, authors who have discovered the freedom that comes with owning and controlling the fruits of their labors are not going back to the plantation.

As Passive Guy has read the tsunami of screeds that have erupted from various participants in the legacy publishing world, he has noted a common subtext: “Big Publishing is the devil we know. It gives me enough gruel to survive. Don’t mess with my gruel!”

PG and many independent authors agree in part. We do know that devil and believe it’s time for that devil to go. Whether a new devil arises or not, we know the old one is beyond redemption. We’ve found a better way.

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Amazon, Big Publishing, PG's Thoughts (such as they are)

265 Comments to “How the Amazon-Hachette Fight Could Shape the Future of Ideas”

  1. Holy s***, this was your “Today is our Independence Day!” speech. Wow!

  2. The last couple of days have been special: PG has been doing a LOT more commenting on the articles he quotes – I like it.

    PG has a nice, orderly, literary mind – and a lawyer’s grasp of logic and reason. I like the new system.

    Of course, it means he’s being prodded with the cattle prod of outrageous disinformation being produced by traditional publishing, but if that’s what it takes…

    You really need a Like button – even though it would just accumulate large numbers.

  3. Well said, PG. Obviously the diet coke is working for you 😉

  4. The Big 5 tried to create their own eBook online retailer and failed but I’m curious why they haven’t tried to purchase Barnes & Nobles together and then (despite author and agent protests) pull all their books off Amazon and tell retailers they can only buy them on BN and indie bookstores.

    There’s not a lot a Big 5 publisher can do except for build their own mailing list of consumers which they should have been doing decades ago…

    • I forget the name of that one, but it tanked pretty fast, if we are thinking of the same one.

    • The Big 5 don’t want to start selling directly because it will tick off other retailers (indie bookstores, Target, Walmart, etc).

      • Yeah. Their business model depends on selling to STORES, not to readers.

        Used to work great, but it’s 2014 and they STILL haven’t figured out that their customers are no longer bookstores, but individual readers. By now I’m pretty sure it’s too late to figure it out and do anything to change the status quo.

        • This (if you’ll forgive me for beating my pet dead horse again) is one of the chief reasons why the publishing industry today reminds me of the mainframe computer industry 30 years ago.

          Take Ruinous Pendom, or whatever it’s called. Here we have a company all of whose policies and procedures are aimed at selling big job lots of books to chain bookshops. They can’t afford to change those procedures in such a way as to antagonize those chain bookshops; and selling directly to readers would do just that. If they made the change, they would ultimately benefit, because if they sold to readers they would not need bookshops anymore; but their business would not survive the transition.

          About thirty years ago, Burroughs, one of the big mainframe makers, introduced its own PC. The Burroughs PC was actually a pretty spiffy piece of equipment, but it had two things wrong with it. One, it was overpriced; two, it was sold primarily through Burroughs’ own sales force, which was only trained to sell million-dollar mainframes to big businesses. That meant that most of the consumers who bought PCs (including small businesses and schools) were outside of Burroughs’ reach. But they couldn’t sell through retailers as IBM and Apple and Commodore did, because that would antagonize their own sales force and lose a lot of their big-business customers.

          IBM’s most brilliant decision with the IBM PC, by the way, was to sell through retail stores. It made the IBM salesmen hopping mad, but it opened up the PC to millions of people who would never receive a call from an IBM salesman. IBM could do this because the PC division was run as a separate business, and did not have to answer to any other part of the company; so the salesmen did not have the power to order it about or even shut it down. Burroughs, however, was not flexible enough or far-sighted enough (or maybe rich enough) to do that. So Burroughs stepped right on the land mine that IBM cleverly went around.

          I trust you can see where this is going. Ruinous Pendom doesn’t have the skills to sell to consumers, just as Burroughs didn’t have the capacity to sell through retailers. Their existing marketing structure is blocking them from reaching the new customers they desperately need to reach. And they cannot just get rid of the existing structure, because (unlike IBM) they don’t have enough money to get by without their old customers while they build up the new business.

          That, by the way, is also why the Burroughs PC was overpriced. The price had to include a fat percentage for the sales staff’s commissions, and to cover the cost for a Burroughs in-house technician to come out and do warranty work. PC customers didn’t expect on-site service, but Burroughs’ corporate customers did. The existing structure was expensive to maintain, and that required higher prices than the new customers were willing to pay. Sounds familiar, doesn’t it?

          • Do you think there’s any way for their business to survive such a transition?

            • Incumbents in this position don’t survive the transitions. They just don’t. Publishing is late to the party, but they’re not special snowflakes.

              The IBM PC example is accurate but small scale. On a larger time horizon, IBM is no longer in the PC business (sold to Lenovo) and still adhering strongly to its original constituency: large corporations and IT consulting.

              Consider, among many other barriers, the difficulty for publishers of setting up any sort of real data-driven business, such as selling directly to readers. Where will they get the IT types? Given the choice of working for IT firms, Library Science firms, or Publishing firms, techies uniformly avoid the last. How would they advance their skills, improve their resume, stay abreast of the latest developments in a career ghetto like that?

              • Exactly so. However, it wasn’t the inability to sell via retail that doomed IBM’s PC operation; it was that IBM never got the hang of two-way communication through that channel.

                By that I mean this: The original IBM PC basically conquered the entire market. Sure, there were clones by the scores, but as the old saying went, ‘Nobody ever got fired for buying IBM.’ But IBM wanted to kill off the clones, so they introduced the PS/2 line, which used a lot of proprietary technology and wasn’t fully backward-compatible with the PC. If they had listened to their customers, the customers would have told them, ‘We need that compatibility, because we have billions of dollars invested in third-party peripherals and it would ruin us to adopt your new standards.’

                Why didn’t IBM hear this message? Because the company’s eyes and ears were the direct sales force, who were not involved in the PC business. To an extent that would have astonished those who knew IBM in the days of the motto ‘IBM Means Service’, the PC division was flying blind. So the company made a gigantic mistake that the sales force would have warned against in its palmy days. IBM lost its dominant position in the market as users switched to the PC clones in droves.

                I think there’s a lesson about publishing in this, too. Even if our friends at Ruinous Pendom learned to sell to the general public, they are still basing all their critical decisions on listening only to chain stores. There are two new skill sets that they are going to need, and that will be more than twice as hard to learn as one – especially when their existing revenues depend on doing things the old way.

              • A prime example of big publishing’s failure to Get It. Consider Standard Manuscript Format, even in this day and age of digital files, automatic character counts, page counts are still calculated by the 60-character line, 25 per page. 12-point Courier (or other monospace face), 1.25″ margins left and right.

                Meanwhile, the smaller and nimbler companies in the graphic arts field adapted to DTP 25 years ago and are in their second or third generation of best practices.

                • Yeah, that one always maddened me. If I want to know page count for one of my books, I dump it into InDesign and do a castoff straight from the print layout. If I chose, I could whomp up a master file suitable for transmission directly to any book printer or offset job press. (I don’t have all the necessary skills for interior process colour, but who needs that for novels?)

                  And here’s the thing – I’m not even a graphic artist. I just learned this stuff for the fun of it, and because I wanted to understand what it was that publishers did. Nobody ever told me that I was learning to do it in a much more efficient and technologically savvy way than they ever allowed themselves to adopt.

                • The page count isn’t about the layout of the pages of a book.

                  It’s a way of measuring the size of a manuscript so that they can assign a reasonable number of hours or cost to all the different processes that are involved in going from manuscript to published book: editing, copyediting, XML coding and print layout, proofreading, and the cost of ARCs and so on.

                  It also helps you estimate the likely cost of the printing (although it’s not the same as the actual page count, and yes, we all know that it’s not).

                  It’s not publishers being stupid. It’s publishers getting a standardized metric, across many processes, and many different types of manuscripts.

                • I know that. I’m not stupid.

                  But the most accurate way to determine the page count of a book is to lay it out and do a page count. Everything else is an approximation.

                  It’s not publishers being stupid. It’s publishers getting a standardized metric, across many processes, and many different types of manuscripts.

                  No, trust me, it’s publishers being stupid. Because their method was developed a century before the invention of electronic typesetting, when only imprecise methods were technically feasible. Every time a manuscript changed formats, someone had to set the whole thing up manually, and Linotype operators, frankly, were more expensive than writers. All of that stopped being true during the 1980s, but publishers did not adapt to the new tools.

                  As recently as 2010 – the last time I submitted anything to a traditional publisher – there were houses in the business that insisted on taking paper manuscripts only, and then hiring a typesetter to retype them word for word, because they would not accept any kind of electronic file from a writer. This was blatant folly.

  5. Patricia Sierra

    …headed to the store to get some of what PG’s drinking.

    • +10 Patricia! You just channeled into my mind the image of Meg Ryan in the diner with Billy Crystal. “I’ll have what she’s having.”

      Brilliant and I wasn’t drinking anything at the time I saw your post, so no keyboard cleanup required.

    • I’m with you PS. Thet thar aspartame is prolly the secret ingrediant

      • The real secret is plain old caffeine (and fizz, which, as is now known to Science!!!, propels the caffeine straight into your brain, ’cos bubbles rise to the top and stuff). Drink lots of Diet Coke, and you get a pretty good caffeine buzz. Drink the same quantity of regular Coke, and you’ll be in a sugar coma before the buzz hits. I switch back and forth between the two, depending on whether my brain is more in need of sugar or caffeine to help it switch on.

        Clearly PG has not just been drinking lots of Diet Coke; it would appear that he has been mainlining the syrup.

        • gosh help us all Tom, me too, like you. hopefully better than remember, maybe you dont, arent old enough, those over the counter pills some people took to cram for finals… i think they were supposed to be pure caffeine. Im not sure, but I think diet coke can cause levitation. Whereas, you’re right, reg coke can cause degradation unto comotose.

  6. Standing ovation for PG’s comments at the bottom. Bravo!

  7. Am I the only one who thinks that this place is hopping enough to necessitate a message board?

    I might be. I often think stupid thoughts.

  8. What’s worst for the consumers/readers? The price fixing of the Trad-publishers or the potential that one day Amazon may fix the prices?
    Hint: what’s better a bird in hand or two in the bush?

    • Let’s see. Limit my ability to read what I want because I can no longer afford it or too much choice of reading material at prices I can afford. I’ll take choice, please.

  9. Here is where there is more full-of-crapism: I remember editors telling–specifically telling–writers what they would not accept in terms of characters and plot situations in novels, how to retell it so it would sell to them.

    Amazon lets you publish your book no matter how marketable or hip or stupid and trite your novel premise and characters are. IN other words, the ones controlling writers–and their ideas!–are the publishers. Amazon just lets you write and put up there whatever your fancy desires. Tell it your way.

    Amazon is not controlling what I read. They can’t. The way they make money is putting it all out there and luring folks to buy more books and read more. Variety to suit all customers.

    Legacy publishers are controlling what is read, deciding what is good enough and sending back for revisions according to their vision/policy/taste. And yes, I’ve heard authors b**** about the revision requests changing points in the story and about covers they hate and changes in titles they had no control over. The publishers controlled it. And control the marketing. The promo (if any).

    By definition, a gatekeeper decides who gets through. Amazon doesn’t have a gate that says: only this type of story, this length, these character types, with this branding and this cover and this title, etc.

    Will they be gatekeepers in future: How does that make them more money? Really..how? They want to make moolah, bestsellers or long-tail modest sells. Profit. That means it’s better for them to sell deep and wide. Open the gates and come on in.

    The ones controlling authors (and what is read from their houses)…yeah, think about who does that.

    • I regret the lack of like buttons. This all over, every day of the week and twice on Sundays.

    • “Amazon doesn’t have a gate that says: only this type of story, this length, these character types, with this branding and this cover and this title, etc.”

      To be fair, Amazon does have a gate. There’s a minimum length requirement (2500 unless that’s changed in the last year), there are limits on what the cover can have on it (in terms of how much flesh you can show), and there are restrictions on content (though with the content restrictions it’s mostly a narrow band of restrictions and mostly all having to do with erotica titles).

      But they are still a gatekeeper. They’re just letting 99.9% of books through that gate. Which is *much much* better than traditional publishing — this isn’t to defend trad publishing at all.

      • Well, the self-p*** drinking baboon got through. Maybe they took it down later? But really, the urinating baboon got through hahahha And wasn’t there a book that was just the word “fart” over and over? And we were just cracking up last month on FB, some pals and I, about the dinosaur-human porn short stories that are self-pubbed over there.

      • The controls on the cover content are for obvious reasons – if they push the envelope, people will just push it further. And next thing you know even the current administration’s DOJ is filing obscenity charges. (It’s easy to hide obscenity by obscurity in text. Not so much in cover pictures.)

        As far as the length thing… that is not official KDP policy to the best of my knowledge and belief. The incidences I’ve heard of have all been people whose books were short on both word count and content quality. It makes a convenient “and another thing” for the “we’re delisting you” letters, but I don’t know that it’s a bright-line rule. I am perfectly willing to be proven wrong.

        The closest I can find to a rule on this is in the “Disappointing Content” section of the KDP FAQ, which states that “We do not allow content that disappoints our customers, including but not limited to: […] Content that is too short.” (Note that “Content that does not provide an enjoyable reading experience” is on there too, which for all of me means they could junk the rest of the list.)

        So they might have a problem with Papa’s “Baby Shoes,” brilliant or not, but I don’t know that we know exactly where the line is.

        • I could see a limit on size if they figure someone is gonna charge 99 cents or 2.99 and then, bam, a 5 page story. Some folks might complain (and maybe have, hence the rule).

          I’ve bought short stories on Amazon, so I know content can be brief. I”ve seen non-fiction offerings that are a couple dozen, even fewer, pages.

          I do suspect some folks whined to Amazon that they paid X dollars and got 4 pages of stuff. Wouldn’t surprise me.

    • I am starting to notice “author’s cut” ebooks from reverted backlist, presumably that address this exact thing. A famous example is joe haldeman’s Forever War which had a different (less homosexual) middle section throughout the 1980s and 90s. Then when cultural norms shifted the publisher realized they didn’t have to censor the original anymore. The next book like that doesn’t have to be rewritten for gatekeeper’s censorious sensibilities if the author just self-pubs it.

      • Suburbanbanshee

        Re: “author’s cut,” sometimes this is a good or educational idea and sometimes it’s… um… evidence that editors can help you.

        The one I remember was the guy who was so proud of restoring his original starting chapter for his novel, which had been cruelly censored by an editor who just didn’t understand. So yeah, I bought his ebook of this novel which I’d read a zillion times and enjoyed.

        The original beginning turned out to have been an extremely graphic rape scene (which turned out to be a flashback dream). The main character starts out the novel getting raped, which (aside from reminding one strongly on 70’s feminist fantasy novels where the hero’s journey usually begins with her getting raped to a pulp, except worse) really didn’t reflect the pleasant space opera content of the rest of the book.

        And then, there were also a couple details that just made no sense with female physiology; so yeah, I’m pretty sure the old editor’s cut was a good plan.

        Frankly, if I’d read that opening chapter originally, I would never have bought the original release of the book. It might have put me off him as a writer entirely (still not sure it didn’t now).

        So it doesn’t have to be an “editor,” but somebody may have to talk the author down. 🙂

    • The first five books I indie published were all turned down by the legacy publishers. (One did get an offer, but it was so bad I turned IT down.) I have already earned more than the legacy system would have with *each* of those books, and Amazon gets a cut of my success.

      I doubt very much anyone at Amazon has ever read my books–they didn’t have to. That’s not their area of expertise. Yet they are earning a profit from me and the legacy system–that would be the one which “nurtures authors” and “promotes new voices” and “sustains literature”–gets nothing. Amazon doesn’t have to find the Next Big Thing, the NBT is coming to Amazon.

  10. Just posted the screed in full on the Amazon kindle forum thread, “Amazon’s heavy-handed anti-consumer tactics.”

    http://tiny.cc/8xymgx

  11. Testing. For a second I got the mobile version of the site.

  12. +1 PG! Thanks for providing thoughtful, insightful commentary. That is my favorite part of your awesome blog.

  13. Come now. If not for publishers investing in new and innovative writers, the Horror shelf in my local book store wouldn’t consist of:

    Steve Jobs, Vampire Hunter,
    Al Gore, Zombie Hunter,
    Oscar Wilde, Werewolf Hunter
    My Vampire Boyfriend
    My Vampire Girlfriend
    My Vampire Same Sex Marriage

    and whatever the latest Stephen King novel is.

  14. Mike Shatzkin said:”But serious nonfiction books won’t get published. Those are the books that will go first.” This statement is such a bunch of B.S. More serious non-fiction books are published today, like I wrote about my escape from communism, because the Censoring Houses, the Big Publishers, are losing control over the distribution outlets. Thanks to Amazon, we are moving from a Cartel-Book-Publishing model to a democratic model where every person can write, publish and sell his or her book. That’s how free enterprise works and the consumers/readers don’t have any obligation to pay higher prices and keep obsolete technologies and cartels in business. Big Publishers are dinosaurs who have fleeced the readers and exploited the authors.

    • One of the best things for me about self-publishing is the flood of unusual memoirs that have appeared. There are a lot of people who have an interesting story to tell about their lives that would have been unlikely to be published by a trade publisher because it wasn’t exciting enough for them.

      • Exactly

      • Interesting. Many years ago I was approached by a man who, in turn, wanted me to approach my publisher about his life story. He had escaped the Iron Curtain by flying a home-made hot air balloon, leaving behind his family in the hope that his escape could facilitate their following him. Admittedly, this was in a time when fleeing the IC was often in the news. Still, I’ll never forget my publisher saying, “No, it’s just another I-escaped-the-Iron-Curtain-in-a-hot-air-balloon story.”

        • Wait, what?! I thought that only happened once, with the two families Disney made a movie about. Dammmmmn. A pox on your publisher.

        • This is freedom, to express yourself. From my point of view, used to censorship, the Big Publishers were Censoring Houses.

    • My political screed against the Baby Boomers, which I consider to be very serious, was published: by Amazon KDP and CreateSpace. I doubt any publisher would have touched it.

  15. It’s Jeremy Greenfield. Editor of Digital Book World.

    Which is to say its corporate bias and wrongheadedness is unsurprising.

  16. Losing control is hard, sniff sniff. Poor publishing houses. What’s really difficult is losing control AND the serfs finding out the Emperor has no clothes and is cheating them, too. Oops.

    For far too long I’ve been listening to horror stories about gatekeepers beating down my author friends.

    Once upon a time authors had no choice but to comply or stop writing.

    It’s a new day. Finally. Fifty years from now (or less, I hope!) people will marvel at the quaint, old-fashioned idea that authors actually kowtowed to gatekeepers to get their work published.

    Bravo, PG.

  17. Well, there is a tsunami of crap. Yes, the publishers have noted that crap sells extremely well and so they publish some, too. But the tsunami started with Amazon and self-publishing.
    I keep hoping things will settle down, but vampires and erotica rule.

    • Damn right they do! And the gatekeepers said they wouldn’t sell.

      *Suzan laughing all the way to the bank*

    • Tie-in novels for TV shows and sleazy paperbacks have been around for a long, long time, and have always sold well.

      Amazon just made it possible to read them on public transit without being embarrassed by the cover.

    • Traditional publishing publishes lots of crap as well. I was on Wattpad the other day looking at what the teens were into. Lots of crappy YA authors out there making an okay living through traditional publishing. What you consider crap, other people consider entertainment.

    • There’s no reason for anything to “settle down.”

  18. Loving your commentary PG

  19. Thank heaven for Amazon! Those nasty snobbish elitist gatekeepers at the Big 5 would never publish the Bigfoot porn that I just can’t get enough of. Thanks, Amazon, for jump starting a true renaissance in American literature.

  20. Well said, PG. Write your thoughts more often, you have a serious talent.

    As for the possibility that Amazon may one day in the future, when the seas boil, the skies fall and Gozer the Gozerian returns, decide to be less ‘democratic’, that once again illustrates the complete ignorance of what is happening.

    Thanks to self-publishing, the serial is back. Memoirs are being purchased. The short story no longer needs to audition against thousands of others for a slot in a small magazine or be bundled into an anthology. Niche topics now have dozens of titles, sub-genres have faithful readers who have been ignored for decades past. Even poetry is flourishing in some corners.

    Amazon has allowed writing and reading to become far more ‘democratic’ just by conquering the limits of a physical bookshelf.

  21. “PG submits that Amazon is far more egalitarian and pro-democratic than big corporate publishing is.”

    With KDP it is, at least so far, because it imposes no filters or supervision over content.

    However, Amazon has several publishing imprints, that are just as selective as traditional publishers. When Amazon’s own skin is in the game, they act like traditional publishing. Remember who ran their imprints not that long ago?: Lawrence Kirshbaum, former Time-Warner books honcho.

    • Can’t disagree with you about Amazon imprints, Peter, but PG is pretty much talking about KDP.

      We’ve discussed Amazon’s publishing rules as well. You may recall I am not a fan of their breakout novelist contest for the rights grab with Penguin.

      I really like publishing my books my way. I’ve created a great production team that will stick with me for the rest of my series (and beyond), and I get to call all the shots about how my book gets published. You just don’t get more indie than that.

      As I’m in it for the long haul, I have no problem waiting to see results, either. Book 2 will be out in a few weeks; book 3 is in the works, book 4 will be out next year–all’s well on Team Meryl.

    • Was Kirschbaum with Time/Warner during the iPublish fiasco? ‘Cause there’s a professional credential if ever there was one.

  22. “We’re gonna draw a little bit of our Hachette authors’ blood, ’cause we’re gonna find out who’s secretly getting ready to do the Indie-Thing. Watching Hugh Howey gave us the idea that every little indie thinks they’re a business. Every little Indie is an individual animal with a built-in desire to protect its own livelihood. You see, when a corporation bleeds, it’s just money. But a book from one of you preparing-to-go-Indie Hachette authors won’t obey when it’s attacked. It’ll try and survive. Crawl away from a hot Amazon negotiation, say.”

    • Heh, Thing reference. Nice.

    • I am personally aware of 2 Orbit authors who are getting ready to self publish something this summer because their sales numbers over the last few months have completely freaked them out.

      Neither will say they are going to quit working with Hachette/Orbit in future, but my guess is that as soon as they get a taste of real, monthly deposits from Amazon into their bank accounts, it’ll be all over but the crying for Orbit.

      • Fabulous. I have many ORBIT books on my shelves, and I’d much rather the author got a big bite of the book price pie.

  23. “Because who could be better for democracy than a small number of huge international media conglomerates controlling the future of ideas?”

    Amazon controlling the future of ideas.

  24. The short version: Amazon is a threat to democracy.

    Is there really anyone who’ll even consider taking that seriously?

  25. The selective memory of this kind of article is amazing. Greenfield says Amazon is taking market share from “independent bookstores (around 2,000 remain today out of the nearly 7,000 there were in the mid-1990s)”

    Somehow he manages to skip the decade when the Big & Nasty corporate book chains put most of those indies out of business.

    Independent bookstores are having a renaissance right now.

    • Anne–SELECTIVE MEMORY. That was my thought, too.

      In addition to that omission (which omission managed to create the impression that Amazon and ebooks account for the decline in indies, rather than the big-chainstores of the 1990s and the deep discounts that the big houses were offering to them and NOT to indies 15-20 years ago), the article also manages to omit that in addition to Apple founding iBooks, five major published colluded with Apple at the time to artifically raise ebook prices. J

      And note how the article positions Hachette’s motivation for battling Amazon as being… to “help protect its other trading partners, most importantly Apple and Barnes&Noble.” Because Hachette’s noble and honorable, not a self-interested corporation.

      I’ve been very disappointed by The Atlantic for the past couple of years. Used to love that mag.

  26. Amazon is NOT a friend to the self-publishing author. They really, really don’t care. They want to make money. That’s all that they want.

    FOR NOW, they’re doing that by establishing an open and thriving market in which independent publishers (under $50 million per year, and there are tens of thousands of them, just as there have been for DECADES) and independent authors (aka self-publishers) can have equal access.

    Selling through Amazon is NOT selling directly to the customer, and should Amazon choose to exert its power over independents again, as it has done in the past, then we’ll all have to put up or shut up.

    Should Amazon at any point choose to exert its merchandising muscle (entirely legally so) to push one political or intellectual agenda over another, it’s going to be “amazingly” hard to resist that push.

    I understand, everyone understands the appeal of Amazon as a partner. But we need alternative distribution channels. Right now, Amazon has hit 40% of all trade books and 64% of all online sales of trade books. And the trend line is up.

    That’s a dangerous concentration of control, for publishers of all sizes, including self-publishing authors, for readers, and for freedom of thought.

    • We don’t need a FRIEND. What we need is a reliable BUSINESS PARTNER, to distribute our work for us, without taking our IP for a life-time + 70, and throwing indentured servitude (non-compete) into our contracts.

      FOR NOW works for me.

      I don’t want to sell directly, it’s not my speciality, I’d rather spend my time writing and leave Amazon (and other sales platforms) to do what they do best.

      If you don’t want to use Amazon, go knock yourself out and build your own retailer. If it works I’m sure we’ll all be there . . .

      When Amazon unveils the ORBITAL MIND CONTROL LASERS I recommend tin foil hats, and I hear sprinkling fresh coffee grounds works too. Or you can just use a blog, like this one, to retain your constitutionally protected right to express your free thoughts.

      /sarcasm

      • Yes. This exactly.

        While I think most of us here generally approve of Amazon, I don’t think anybody here is naïve enough to think that things could never change. We’re all here because of a massive disruption. Massive disruptions can occur at any time.

        What’s nice is that unlike corporate publishers, Amazon is a tech-based business. That means Amazon is also prone to massive disruptions, and it knows it. Disruption is an eternal part of tech-business landscapes. The fact that Amazon needs to watch its butt a little bit and be a tad wary of new technologies, methods, and startups means that Amazon will probably (but not definitely) never get as bloated and self-serving as the Big 5 got.

        But that’s just a probably, not a certainty. I think everybody here is aware of that, and on the lookout for the first signs that it may be happening so we can all change strategies as needed.

    • News flash: no business *cares* about you. They care about your wallet. The same goes for traditional publishing. Most of them will claim to care about you while also exploiting you so that they can pay their own bills. And you know why that is? Because businesses don’t run on caring. They run on cash.

      And I don’t need Amazon to care about me. I have actual human friends for that, not corporations. I need Amazon to help me distribute my work and pay my bills, which it turns out they do pretty well for the time being. When they stop doing that well, I will move on to something else, like most rational people.

      As far as trying to suggest that Amazon is a monopoly, which is apparently the point of your post..it’s not. Amazon has competition now and will in the future. One day some company will figure out how to beat Amazon and then other competitors will crop up to compete against them. That’s just how these things go.

      If you dislike Amazon so much, then don’t use them. Find another distributor. Go back to traditional publishing if you need to (for as long as they last). It’s not like you *have* to use the same things everyone else does. It’s not like you have no choice. You always have choices. You just happen to find them distasteful, but it doesn’t mean they don’t exist.

    • “we need alternative distribution channels. ”

      Of course we do. The best possible scenario for writers is if there are multiple very succesful ebook vendors all competing hard to be the one which we and which readers do the most business with.

      Which makes me doubly disgusted with B&N and Apple. They were each in a great position to be that kind of competition for Amazon. And they’ve both faffed about in the most sad, inept, incompetent way for YEARS now.

      Publishers were in a great position to do that, too. These were huge corporations with enormous resources and massive quantities of titles under contract. They could have set up fantastic author-centric ebookstores and attracted readers with direct marketing. But have they? No, for years, their focus has been to protect print and screw writers, rather than to exploit the tremendous business opportunities of digital.

  27. “But we need alternative distribution channels.”

    The publishers can set up alternative distribution channels any time they decide to drop their useless DRM. Baen has been doing it for years.

    • Ah, if only.

      It’s a great idea. It’s one that everyone and their dog has had. There are at least a dozen reasons why it doesn’t work.

      DRM is a TINY part of the issue, especially since a very large portion of the Big 5’s ebooks don’t have DRM anymore.

      There’s the fact that it has to have all or most of the popular books.

      There’s the enormous amount of working capital it will take to create a site that is as good a merchandiser as Amazon’s site. Publishers simply don’t have it, will never have it, and can’t raise it for a business, like book selling, that has such a low profit margin, against an established giant.

      There’s the potential legal tangles involved in transfer pricing to a joint project.

      And on and on and on. It’s not simple, and it’s not easy. It just LOOKS that way.

      • “There’s the fact that it has to have all or most of the popular books.”

        No, it doesn’t.

        Baen has been doing it for about 15 years now. Quite successfully.

        And no, it doesn’t take an “enormous amount of working capital”. It takes a web server and an email server.

        Replacing Amazon outright would be hard. Underselling them for your own books would be easy.

        • It’s nice if publishers or authors have a way to make some sales without Amazon. It’s nothing like an adequate defense against a monopoly.

          Baen started making its ebooks available on Amazon for a very good reason. And I don’t recall that they ever stopped selling their print books through Amazon.

          Oh, and don’t look at Ingram for an example of a monopolist that didn’t do this. Ingram needs the book business as much as we need it. Amazon sells a lot of other things besides books now.

          • The only entity that has a monopoly on selling a book is the copyright holder.

            It would be difficult (but certainly possible) to replace Amazon when it comes to delivering physical goods.

            With ebooks it would be trivial. Bezos knows that perfectly well.

            • Amazon is in approximately the same position that Sears used to be when it comes to physical goods. Sears is essentially gone (the name still exists, but it’s sure not what it used to be). All it takes is one misstep (in the case of Sears, that misstep was scrapping their catalog operation the same year the first graphical web browser was released).

              When it comes to web sites, change happens much, much faster. Remember MySpace? Webcrawler? Netscape? AltaVista?

          • Baen started making its ebooks available on Amazon for a very good reason. And I don’t recall that they ever stopped selling their print books through Amazon.

            This is a truly bizarre way to move the goalposts. First you say that a publisher can’t effectively sell to the public unless it sells ALL the books from ALL the publishers. Well, Baen effectively sells to the public from a site that only sells Baen books. So do you concede the point? No, you do not: You double down on the error by saying that it doesn’t count because Baen does not sell books ONLY through its own website.

            I thought you wanted multiple channels of distribution. Surely the Baen store + Amazon is multiple? Surely Baen store + Amazon > Baen store only? When did this become an argument in favour of freezing Amazon out of the book business entirely?

            If this is how publishing people really think – if they can’t wrap their heads round the graduate-level mathematical lemma, ‘2 > 1’ – no wonder they’re having trouble with their businesses.

            • /me silently passes M. Gropen the Bactine and silver iodide cream.

            • I’m not being clear. I’m a numbers geek and not a writer, so please be patient with my lack of skills.

              My point is that publishers, including self-publishers, need to not be quite as dependent upon Amazon as it seems we are becoming.

              Baen is selling books directly, yes. Everyone knows that, and they’re always brought up as an example in this sort of discussion.

              Problem one: they succeed because they combine a narrow, niche focus in their list, with astonishing depth. They DO have the majority of the books that their audience wants to buy. This is not something that can be extended or applied to most other publishers, including self-publishing authors. (And yes, I do see self-publishing authors as micro publishers, but PUBLISHERS.)

              Problem two: Even Baen can’t remain profitable without Amazon’s contribution, and it’s a hefty one, to their sales volume.

              There are others, too, but I’m going on too long.

              Publishers, including self-publishers, need volume, and if they can’t get sufficient volume without any one player, then that player can push them around. The smart monopolists or near monopolists will stop pushing just short of the point at which their prey will go under.

              I’d rather not have publishers, including author-publishers, in that position.

      • It doesn’t have to be as big as Amazon, or even as good. It simply has to make it EASY for the customer to download that ebook in the form of their choice for a great, great price. If the publisher sells the ebooks from their site themselves, they can give massive discounts to the reader and still be better off $$ than selling on Amazon. If authors link to, email encouragements about, tweet links to the publisher site instead of Amazon (most links I see to books are to Amazon firs, then B&N and others), telling the readers the price is X dollars LOWER than any other site, guess where budget conscious fans will go.

        If I can get the next Dresden book or Koontz book or Stephen King book or whomever for 8 or 9 bucks instead of 12 or 14 bucks, guess who I’ll buy it from? I wanna save moolah, too. As long as it’s EASY and CHEAPER. If it’s complicated or a hassle, forget it. If it’s expensive, forget it.

        They just need some good tech dudes to set up a beautifully simple system and set really low prices. Direct to reader. The authors can do the rest and their marketing folks.

        If I were a Big 5 CEO, I”d be auditioning start-up ideas for tech ideas to make readers bonkers to buy ebooks directly from Hachette, RPH, etc. Get those younguns with laptops and developer/innovator skills working on it. Throw a couple million out to get them brainstorming and beta-ing it.

        • It’s pretty hard to be easier than Amazon if you’re a Kindle user, though. As I point out in the article linked from the next PG post up from this one, Baen made it very easy and cheap to buy and sideload its DRM-free books to Kindle, but people kept complaining they “weren’t on Kindle” because they couldn’t just tap the “Buy” button in Amazon’s store and have it automatically appear on their device. Finally Baen had to give up and revamp its e-book store to make it compatible with getting its books on Amazon, too.

          • True. I love my Kindles. So easy. So fast.

            I really enjoy my Color Nook, problem is that the B&N site, search engine, prices just aren’t up to snuff. Especially the search engine (lordy, it sucks worse than a black hole.) And I have trouble reviewing–a lot, often–on B&N, hence I dropped reviewing over there. I just review at Amazon. B&N is doing a lot wrong when they had (have?) such a nice reader, too.

            But if the publisher makes is simple to use, elegant even, and prices way lower than Amazon, I could see readers who must watch book dollars saying, “Hey, I can save $2.50 per book if I get it over at Hachette’s site.” For folks who buy a lot of books, that adds up.

    • alternative distribution channels:

      Smashwords. Barnes & Noble. Kobo. iTunes. OmniLit/All Romance ebooks. DriveThruFiction. Oyster. Scribd. Noisetrade. There may be others; that’s just off the top of my head.

      And authors can set up their own stores by means of shopping cart software/plugins, shopping pages offered by their web hosting, or services such as Gumroad.

      • To be a viable competitor, the alternatives have to have market share. The e-bookstores you mention don’t.

        That is, of course, the major problem with selling books from your own site. Very few casual browsers will find it, especially if you’re selling fiction.

        And even fewer will buy from you, even if they make the buying decision while on your site. There are rational reasons for that choice, and fighting your customers’ preferences is a losing battle.

        We need a store that they prefer to Amazon, and publishers’ and authors’ own sites aren’t ever going to be that store, if only because of the relatively scant number of titles.

        • No. To be a competitor, they just have to offer the same goods at a better price. That’s all.

          It’s not a monopoly if various other distributors can offer the same items to the public.

          If Amazon gives the best price, best ease of use, best customer service, then they deserve the lion’s share of the market.

          If publishers want in, they could sell the product MUCH cheaper than amazon. Budget buyers would love that. But the publishers seem to be wildly inept at or disinterested in selling their own ebooks and beating the competition, price-wise.

          • Mir: there’s a difference between selling some books and selling enough to allow you to walk away when Amazon decides to expand its share (and decrease your share) of the margins on your books.

            The level of competition that will make a difference, which is what I meant by a viable competitor, is such that publishers will be able to walk away when Amazon removes their “Buy” buttons, or pulls something similar.

            This is more true for self-publishers than it is for the giant conglomerates.

            • This is more true for self-publishers than it is for the giant conglomerates.

              That’s why smart self-publishers are actively working on their new release email lists and on expanding their fan base. With enough true fans, who would follow them everywhere where their book are available, and buy it directly from author’s web site if need be, how large share of the market retailer holds, doesn’t matter that much.

              I believe that trade-published authors would do well with having an release email list, that way when a similar situation as Amazon vs Hachette happens (which it will, since there are four other big publisher in line to butt their heads with Amazon), they would be able to steer their ‘core’ fans to other retailers. But the thing is, would big-publisher be even willing to add a link to their authors’ email link in the back of their books?

  28. That danger exists only if all other media go away and Amazon’s share remains the same (or continues upward) even as the company adopts a radical political agenda.

    Also, all of the articles, posts, and discussions about the danger are happening in and on media not currently controlled by Amazon.

    • No other medium than books does the kind of intellectual analysis that books do. The closest is long-format journalism, where an article might be 10,000 words. And many of those outlets are not prospering these days.

      Yes, there are outlets for short form journalism, and some survivors in the long-form. But books are different, and they’re important.

      • Agreed—books are important. However, I don’t agree that they’re the most important or effective in all cases, especially when it comes to the masses. (Maybe if one were read aloud by a Kardashian on TV—with that hero cat draped over her shoulders?)

        I’d love it if books were that popular—if that many people read them. That’s the kind of danger I’d be happy to face.

        I don’t agree that Amazon has that kind of power over the book world, and I don’t agree that they’d ever alienate a huge customer base by choosing any one political philosophy over another. They’re a business.

        This is a very civil disagreement, certainly. Even if it weren’t, neither of us is going to convince the other. And the odds are nearly as good that by the time one of us proven right (if ever), we’ll both have forgotten all about this discussion. (I can only speak for myself, of course—I don’t remember what I said an hour ago.)

      • The closest is long-format journalism, where an article might be 10,000 words. And many of those outlets are not prospering these days.

        Gee, if only there were a place online somewhere that people could put up their articles without having to go through long-format journalism outlets. It would be sort of like a log of one’s intellectual work, only on the web. We could call it a ‘weblog’.

        Hey, PG! The world needs this invention! Why don’t you see if you can figure out how to start such a thing?

  29. Phyllis Humphrey

    PG:
    Your comments were excellent, as usual. You are the voice of common sense these days. And we are all behind you. Keep it up.

  30. [Disclosure: I like Jeremy Greenfield. I have corresponded with him and he is an intelligent, witty guy.]

    Sigh.

    Think of book publishers like venture capital firms.

    Imagine for a minute that venture capital firms really invested in books. Would they act anything like the Big 5? No. The Big 5 pour their money into proven producers (Patterson, King, etc.) and try for small profits on other books. That is the exact opposite of venture capital.

    Venture capital firms invest tiny amounts of money into lots of different startups hoping that one of them shows some promise. If one does, they throw in some more money and support, in exchange for a bigger piece of the pie and a little more control.

    You know what looks a lot like venture capital in the digital book world? See what I did there, Jeremy? Amazon KDP and Amazon imprints.

    • This.

      And if you distribute everything you’ll always stock the high volume sellers, even if you can’t predict them in advance, and who can?

    • Amazon is the VC of the publishing world.

      Tradpub is more like the evil banker Mr. Potter from It’s a Wonderful Life.

  31. Amazon’s increasing dominance is *exactly* why traditional publishing’s stranglehold on print retail and distribution channels must be shattered quickly if literature is to thrive.

    By volume, Indie books make up 20-25% of the trade publishing market. Including print. America’s readers are voting with their wallets. They want Indie books. They like indie books.

    So why aren’t major print retailers — big-box bookstores, “indie” bookstores, and the Walmarts and Costcos of the world — figuring out how to sell those Indie books to the readers that want them? Or creating new bookselling business models that make sense in 2014?

    Because the big publishers are exercising control to artificially prop up a tired, broken, exploitative print business model that should have died a long time ago. They still imagine they can dictate to America what it should be reading, and as a result, they are going to take print retailers down with them when they go.

    Then Amazon *will* be the only place to buy books.

    But if Big Publishing is eliminated or marginalized quickly enough — along with their wasteful, exploitative business model that steals from midlisters to make megabestsellers, that steals from authors to feed corporate middlemen — then a robust and varied retail ecosystem might just survive.

    Because suddenly the Barnes & Noble’s of the world will be forced to find ways to provide the customer what the customer actually wants to read, instead of the ten books which Big Publishing wants to sell a zillion copies of that month.

    As the resurgence of Indie bookstores proves, clear away the shadow cast by Big Publishing’s dead wood and literature will continue to thrive just fine.

    And maybe Amazon won’t end up the only bookstore of any size because of Big Publishing’s suicide pact with their print retail channels.

  32. “the wall between writers and readers is coming down” –

    amen 😉

    great post! am sharing, all over! 🙂

  33. The Big 5 publishers have less of a stranglehold on traditional publishing than Amazon has on retailing.

    There are tens of THOUSANDS of other traditional publishers out there, folks.

    And they’re not, or not many of them, being harmed by this change.

    I get that authors are thrilled to be able to go around the AEs (acquiring editors) and agents, and go straight to Amazon. Why wouldn’t they be? Although I still think that most self-published books are in dire need for an editor and a copyeditor (two very different things).

    I LIKE Amazon, as it is, although I remember the squeeze-play to try to force self-publishers to use CS instead of LSI for their POD printing (and therefore give Amazon 40% minimum discounts instead of 20%).

    I just don’t trust Amazon to remain neutral, and I DEFINITELY don’t trust Amazon not to squeeze everyone in the industry, especially including self-publishers, for every possible drop of profit, as soon as the rest of the major distribution channels dry up and blow away.

    Folks, if you don’t know the history of the book business, you’re going to be blindsided by it when cycles repeat. And this is one scenario that we’ve seen over and over again. It has some really ugly phases.

    I can’t wait to hear the howls of outrage when the next, and very predictable, stages happen.

    This isn’t dinosaur publishers wailing about their lost business. I don’t work with that type of company, and haven’t for almost 15 of the 25 years I’ve been in the book business.

    This is someone who has been there, seen that, and dealt with the after-effects warning you all to get your alternatives ready.

    Relying primarily on Amazon is going to be very painful, when they start changing the terms on you.

    • Trad pub already has crappy terms, which is why they’re losing writers. If/when Amazon’s terms get that bad, competition will keep cropping up to offer something better and writers will flock to that. Amazon has already proven that there is money in books and authors like having the freedom. Your warnings are really unwarranted.

      • Liz, I don’t see much impact on publishers from that loss of writers.

        I’m not issuing the warning because I want to send anyone toward publishers. I just want you to look for retailers besides Amazon, or some other way to get your books out to your readers. The more people who find alternatives, the less likely it is that Amazon will start acting up.

        • That’s why I said your warnings are really unwarranted. Many of us do have multiple distributors. I’ve always made the most on Amazon but I also have months where I do as well or better on Smashwords. I don’t think anyone is saying that only Amazon should succeed, so who exactly are you warning?

          • You’re in good shape if you can delete your KDP account, stop selling books through Amazon and not feel much pain.

            Otherwise, you’re at risk.

    • I can’t wait to hear the howls of outrage…

      That’s just sad, Marion. Really sad.

      • It’s rhetorical, of course. No one wants others to suffer pain. Especially not someone who’s devoting this much time and aggravation to trying to warn others of a potential problem.

    • Folks, if you don’t know the history of the book business, you’re going to be blindsided by it when cycles repeat. And this is one scenario that we’ve seen over and over again. It has some really ugly phases.

      Oh, really? Tell us, please, on what previous occasion did a single retailer get control of the majority of book sales? When did the cycle of authors being able to publish books worldwide without the intervention of a publisher occur before, and what was the ugly phase?

    • Oh, by the way:

      This isn’t dinosaur publishers wailing about their lost business. I don’t work with that type of company, and haven’t for almost 15 of the 25 years I’ve been in the book business.

      I’d like to hear who these publishers are that are not dinosaurs. From the writer’s point of view, a small press is only better than a big New York house to the degree that being robbed by a friend is better than being mugged by a stranger. Both kinds of businesses make their living by interposing an unnecessary layer of middlemen between writers and booksellers, and both kinds take the lion’s share of the wholesale price.

      Sure, a small press will give the author a ‘personal touch’. But I’d rather not be touched for that purpose at all, thank you.

    • There are tens of thousands of retail outlets out there, too. If you’re going to claim that the Big 5 aren’t that big a deal even though they control the majority of book publishing since they have a zillion competitors, the same applies to Amazon.

      • No one publisher puts out more than a tiny fraction of all the books sold in the US. The trend is toward smaller shares per publisher.

        Amazon controls the sale of nearly half of the trade books sold in the US, and the trend is upward.

        • No one publisher puts out more than a tiny fraction of all the books sold in the US.

          That’s one point I will agree with you on, Marion, but it demonstrates how very short-sighted your view is.

          The U.S. is a teeny fraction of the world market. I go with retailers who can hit Europe, Asia, South America, Australia, and the rest of North America. No so much with Africa and Antarctica yet, but it’s coming.

          Quite frankly, I make far more through non-Amazon European retailers than I do through Amazon US. And that’s with the English language version of my books. It’ll interesting to see what happens when I start issuing translations.

          You can scream and vent and warn all you want, Marion, but this is the wrong place to do it because most of the regulars here have real world, international business experience.

          • The US is 30% of the global book publishing market. It’s the same size as the next 4 biggest national markets COMBINED. In ebooks, the situation is far more unbalanced in favor of the US, for now.

            Look at my resume, though, and compare international experience. I was actually an executive with one of Japan’s largest publishing companies for 8 years. I’ve done other international publishing work as well.

            And none of that matters one whit to my point.

            My point is that the profits of anyone, including self-publishing authors, are at risk when most of his/her/its sales come from one source.

            In the US, Amazon is almost 2/3 of all ebook sales, and closing in on half of all trade book sales. That’s a dangerous number, and the trend is for those numbers to increase.

            This is not about large publishers being unhappy with the independence of authors. I don’t work with large publishers anymore, and I haven’t done so since I started my consulting practice in 2002.

            It’s about warning all of the indies out there (indie publishers, and self-publishing authors) that they need to start NOW to look for alternatives, because the economics of this situation will force Amazon to act as monopolists always act.

            Those who think ahead will survive. Those who refuse to look past the current situation (which is fine for small and self-publishers) will be road-kill. That’s as true of self-publishers as it is of any other kind.

            • the economics of this situation will force Amazon to act as monopolists always act.

              Oh? You’re saying that monopolies are forced to act the way they do? I guess it’s OK and should be legal, then.

              Chaffing aside, just how is it that monopolists ‘always’ act? Do tell.

              • Managers of a publicly held company have a fiduciary duty to the people who own the company to do the best job that they can of creating profits, within the law and the ethical guidelines of the people whose money they have in trust.

                They are, indeed, forced to take the power that they have and use it for the benefit of the people whose assets are under their care.

                Our laws generally prevent one company from controlling all or most of the access to consumers for any industry. But we’re nearly there for the book business.

                Amazon has already demonstrated the willingness to shift “availability” labels for self-publishers as well as larger ones. They’ve removed “buy” buttons from larger publishers’ books. They may or may not have done other things that tank their targets’ sales drastically.

                All in the effort to extract concessions that will shift profits from the (self- or otherwise) publishers to their own income statement. And if you’re using KDP, it won’t even require that much effort. They simply announce the change, and you either continue selling through them, or not.

                You are right that a situation like this should be addressed by anti-trust actions. But I’m not a lawyer. I don’t know what grounds the DOJ might have for doing so.

                In any case, having the DOJ take action won’t help us all that much if there isn’t at least one other large online retailer of books.

                I don’t see who will create it, nor do I see any financial situation that would encourage any of the likely candidates to do so. The margins are not attractive, and aren’t going to be for the next few years, at best. May never be.

                Regardless of what would help the entire book business, each and every publisher (including all author-publishers) needs to develop a contingency plan, and try to find alternative distribution channels that are sufficient to keep your operation alive when and if the big A starts to swing that big stick.

                • “But we’re nearly there for the book business.”

                  Okay, I understand you’re not a writer, but a numbers guy should understand that “nearly” means, at the very least, “way more than half.”

                  Given that definition, explain the logic underlying this assertion.

                  Caveat: you cannot have it both ways. When it suits you, you talk about the “book market” as if it meant popular fiction/nonfiction, and when it doesn’t, you talk about it as if it included all books, everywhere. You need to stop doing that if you want anybody here to take you seriously.

                • You don’t have to have 100% of the sales, trade or in total, go through Amazon for them to have absolute power over almost all publishers, including those who are author-publishers.

                  Nearly there, in this case, means that Amazon will soon have enough of the US book sales that no major, and few minor, publishers would survive having the “buy” buttons removed for more than a very short time. Look at what happened to Macmillan, and you’ll see that the damage was significant. And Amazon’s market share has grown since.

                  You’re right that I haven’t been careful enough about specifying whether I’m discussing global book markets (almost never), trade book markets (usually) or all US book markets (sometimes). Thank you for pointing out that error.

  34. Folks, if you don’t know the history of the book business, you’re going to be blindsided by it when cycles repeat. And this is one scenario that we’ve seen over and over again. It has some really ugly phases.

    Can you give us some examples of how it has happened over and over? wWhen? Where? What happened?

    • Terence, I could, but let’s look at the most recent.

      Self-publishers (in POD print) were using LSI because they could make a lot more money by selling the books to Amazon at 20% off of list, than they could at the 40% that CS insisted upon.

      LSI’s drop shipments were as good as CS’ or within a few hours, so their books were showing as available.

      They could set the price that they wanted, and Amazon wouldn’t discount it, so that they didn’t have problems with “most-favored nation” clauses in other contracts. All was good.

      Then suddenly, any book printed through LSI that sold well started to have 2 to 3 week availability, while all CS books were freely available. And other, competitive books that were printed through CS were suggested right below that “availability.”

      Sales tanked on all the stronger selling LSI-printed titles.

      Everyone had to switch to using CS to sell to Amazon, and give them the extra 20% of list price. They could sell to everyone else through LSI, by not choosing CS ED program, and keep the 20% short discount for all other bookstores (either as a textbook, or under a STOP plan for bookstore special orders).

      But no one really wanted to lose that chunk of money to Amazon. They just couldn’t afford to do without those sales.

      As I said, just one example. There have been others from Amazon.

      Before Amazon was the 900 lb gorilla, there were others in the book business. And they, too, laid down the law and extracted their “monopoly rents.”

      • I don’t know about most indies, but I only sell a tiny handful of books in paperback. I offer paperbacks for people who want them, but I really think demand will continue to decline. So what goes on with paperbacks isn’t a big deal for me.

        ETA: This sounds like a legacy concern, not an issue that will be terribly important in the future.

        • Marion’s a publishing consultant (similar to Mike Shatzkin) who used to work for Simon & Schuster.

          Ithink you were right about the whole fear-mongering track yesterday, Kathlena.

          P.S. I really apologize for misspelling your surname in another comment. Mea Culpa.

        • Kathlena, yes, most self-publishers no longer need to worry as much about POD, but at the time, it was a serious blow.

          It’s still a harsh problem for those whose sales are heavily in print. As we all know, some types of books don’t work well at all in any of the popular ebook file formats.

          Remember, only in fiction and a little of trade non-fiction are ebooks becoming the primary format. If that’s not what you do, you still need print.

          And only 1/4 of all book publishing sales are in fiction. Only 1/2 are in trade books, including fiction.

      • Before Amazon was the 900 lb gorilla, there were others in the book business. And they, too, laid down the law and extracted their “monopoly rents.”

        Name them, please.

        LSI is a pinprick on a hair on a wart on a fly. POD has never been a significant player in the book business, and it’s quite possible that it may never be. It’s the right answer to the wrong question, the question being, ‘How do we make it economical to distribute paper books with print runs that are too short to be feasible with offset?’

        POD is the fax machine of book technology. It’s a stopgap for people whose minds are wedded to the idea that communication requires a physical object made out of paper, and it only came along after the all-electronic technology that superseded it already existed – because it needs elements of that technology in order to function.

        • WalMart, for example. They were a huge distributor of paperback romance, and so WalMart wound up having power over content, titles, and covers. An author could be told (that is, I know authors who were indeed told), nope, you can’t write that, because WalMart won’t stock it. Covers got redone and books got retitled on the basis of WalMart declining to stock it, because WalMart was too important to that distribution to be refused–and they did exercise their power.

          BN was another. Deep discounts drove the business in the 1990s, and BN drove the deep discounts. Big publishers needed them more than they needed indies, so BN got deep discount deals which enabled them to price stock so much lower than indies that more and more indies went out of business because they lost too many customers to BN.

          And in the 1980s, publishers had to get into Waldenbooks and Daltons, the huge chains with those little storefronts in shopping malls. They were the major route to bestsellerdom for mass market paperbacks.

          • Walmart, Waldenbooks, and Daltons all had severely limited shelf space for books. Their ‘power’, from the author’s and publisher’s point of view, was their weakness from their own (and the consumer’s) point of view: They could not stock everything; they had to pick and choose. But this was not a new phenomenon in paperback publishing. Publishers’ schedules, and their choice of books to acquire, were always determined by the constant Darwinian struggle for rack slots with the major distributors – right back to the invention of the MMPB in the 1930s.

            In none of these cases were the major distributors and retailers ‘exacting monopoly rents’. They were trying to make the best use of limited retail space, because that retail space was hugely expensive and the competition from other retailers was ferocious. If you didn’t earn enough dollars per square foot, you would lose out to a more efficient retailer that could afford to pay a higher rent.

            BN never prevented a book from being published. They needed, at the time, all the titles they could get from Big Publishing, and then some, to fill the space in those stores. Of course, now that they are moribund and a big chunk of their square footage is devoted to throw pillows and scented candles, they’re in more like the position of the old mall chains.

          • Well, thats something I expect. Its normal commerce. Walmart treats books just like they treat T-shirts and electric drills. They know what they want, and go looking for people who can supply it. Likewise, those suppliers do the same with their subs, in this case authors.

            B&N was also treating books as large retailers deal with any goods. They went for economies of scale and large purchases.

            In both cases, consumers got goods at lower prices. Neither company was set up to give suppliers an outlet. They were set up to sell stuff to consumers at a profit. They decide what they want to sell and then do the best they can to meet that spec at the lowest price. If one supplier can’t do it, they go to another.

            And like Tom said, shelf space isn’t there so publishers can decide how to fill it. Its a very valuable resource that the retailer is gong to exploit as much as he can.

            We used to have the opposite situation with DeBeers when they really had something very close to a monopoly with diamonds. Jewelry makers would come to DeBeers to get diamonds. DeBeers would then give them a box of diamonds that DeBeers selected for them. The jewelry maker could take it or leave it. He couldn’t pick what he wanted. He was just handed a box and given a price for the box. All that changed when the Russians and Blood Diamond guys broke the cartel.

            So these things we see with books today are not at all unusual. Its normal stuff. There is really no reason to be surprised. It is all to be expected. Perhaps books have been insulated. i don’t know. But this is what everyone else deals with on a daily basis.

        • I have fans who refuse to read my books on Kindle. I don’t read on Kindle myself. And my POD titles are selling quite well, so this isn’t a negligible issue for me. I think books will stay around, and I hope the publishers won’t be the only ones supplying them.

          Sometimes I think this venue allows only one point of view and only one format. And any criticism of Amazon is an immediate war cry.

          Discussion of issues is healthy. Closed minds are not.

          • I think with tech innovations-inevitable given the frothy young minds out there–start-ups will arise and figure out new and great ways for folks to access reads–and find them, to begin with.

            I read on any format I can access for stuff I want. I’ve bought direct from editors/authors in pdf, in epub and mobi, Kindle, Nook, Sony Reader (now defunct), Kobo (I have a library of 40+ books there, not equivalent to the nearly a thousand I have on Kindle, but hey, I’m new to them). I find Kindle and Nooks the easiest to download and access, but if the author gives me a good product at a good price, I’ll read a pdf download on my laptop. I’ve gotten beta reads in Word Doc that I send to my Kindle. No problem. If it’s readable, I’m happy.

            Readers just wanna read. And if I had enough moolah to be able to maintain a 3to 4K sf home till I die, I’d happily keep buying paperbacks and hardcovers. But…I’ve run out of space (long ago), hence ebooks saving my reading and book-hoarding lifestyle.

  35. Yes, there are a lot of small indie publishers out there. Yes, you can get a contract with them (I’ve had 12), and make a similar percentage as with a big house WITHOUT THE ABILITY TO GET PRINT BOOKS INTO STORES. That’s been a biggie in my career so far.

    I’m making more on my two indie titles through Kindle-exclusively than I’m making on 9 titles through my small press. You do the math and see what choice I’ll make, going forward.

  36. I just think PG ought write his own books… he’s got the passion

    action figure PG… champ of publishing justice, faster than a speeding bullet, able to leap at least small buildings [he’s in training…

    thanks PG

  37. Because of the time difference, when I go to the PG’s blog, I always have a feeling I’m late to the party, while this time I have a feeling that I missed the peak of it.
    PG, you wrote such an awesome commentary. You really should share your opinion more often.

  38. “Or, much more nefariously, it could discourage readers from buying books with a point of view it doesn’t agree with.”

    Oh, like HarperCollins dropping a book by the former Brit ambassador to Hong Kong because it criticized China (a market Murdoch wanted into). You mean that kind of book?

  39. Hear,Hear! Well said, PG.

  40. Well said PG.

    I felt all “It’s not what your country can do for you…” when I read that. 🙂

    That said, while no one knows the future for Amazon, they are a middle man … a well established distribution channel. They are valuable for the self-publisher in that way.

    Because they are in the middle, between an author and the reader, the author should use Amazon as a tool… NOT simply rely on them to be the “easy way” to build a readership.

    Market your books, become your own distribution channel.

    Then it doesn’t matter what happens to Amazon, or what they may or may not do in the future. Use Amazon to help you build your readership by connecting with your readers.

    Build an email list, stay in contact with your readers, participate on Twitter WITH people. Be everywhere you can.

    James Patterson is worried because his “comfortable” distribution channel is eroding (slowly) away. His business was built on Big 5. Take that away, and he will still create TV ads, still market his book writing business… but WON’T have immediate distribution through bookstores.

    (Although, come on, it’s James Patterson, he can pretty much walk to any bookstore and sell on the shelves, as long as those shelves exist, right?)

    You, build yourself into the best distribution channel you can, using whatever tools you can to help(Amazon for now, whatever for the future).

    Amazon is a tool for you to use to get your books into reader’s hands … nothing more, nothing less. A tool. Not a monopoly, not something you should lose sleep over.

    A tool.

    Now, that was mainly for authors who are building a business selling and marketing their books.

    If you’re just publishing your memoir, and have no aspirations further than that… you’ll use whatever tool you need to and get your life story published. Right now, Amazon is that tool, and you have an unlimited opportunity to publish.

    So publish, now.

  41. Chris Armstrong

    I was disappointed to see an author I like post a blog on this topic – standard “amazon is an evil monopoly” stuff.

    The thing I find most disheartening about it was that there was a stipulation that she didn’t want the comments to become a rehashing of the merits of amazon and self-publishing.

    So, in effect, the only comments posted or approved were in agreement.

  42. “If it can set the prices across retailers, it can do a little to help protect its other trading partners, most importantly Apple and Barnes & Noble.”

    I think they tried that already. There was a big court case and everything. This is Resale Price Maintenance, which, thanks to SCOTUS in ’07, is currently (mostly) legal. It’s what they colluded to try to enforce. It was legalized for a bit last century but ended up so badly, the practice was banned again through legislation in the ’70s. Yup, let’s try that again.

  43. I tried not to comment on all this, but couldn’t help it, and linked to here as one source: Amazon and Hachette- Godzilla vs. Mothra
    http://daletphillips.blogspot.com/2014/05/amazon-and-hachette-godzilla-vs-mothra.html

  44. Reposted in its beautiful and inspiring entirety with a few comments at the end.

    http://anonauthor.blogspot.ca/2014/05/passive-guys-call-to-arms.html

  45. PG – you are my hero!

  46. Thanks for such a thoughtful reading of my piece in The Atlantic.

    I don’t know why, but some people have really misunderstood what I wrote. I’m not saying that what Amazon is doing is bad or wrong and that publishers are good or right. And I’m not saying that Amazon is bad for Democracy. I was just positing some thoughts on a future where Amazon had three-quarters of the book retail market in the U.S. A very hypothetical thought experiment. That’s all.

    But, for the record, I think that Amazon’s proliferation of the ebook and the rise of independent authors are the two most significant things to happen to American books — and perhaps in books worldwide — in a very long time. And as a lover of reading, books, ideas, media, business and innovation, I am thrilled at these developments and in awe and admiration of those who helped them along.

    I hope a careful reading of what I wrote will make it clearer that that this is how I feel. Several other people commented or wrote emotionally about my piece, which also elicited hundreds of comments at The Atlantic, and when I engaged them to discuss in, usually cooler heads prevailed.

    Again, thanks for reading!

    best,
    Jeremy

    Ps – By the way, indie authors who think that they aren’t Amazon “suppliers” and that some day executives at Amazon won’t start chipping away at that 70% royalties number are delusional. Amazon — and many retailers before it (see: Walmart) — have done the same for a very long time. Why are authors different from any other suppliers? Publishers certainly aren’t.

    Pps – We are indeed seeing a renaissance in books and much of that is due to Amazon and indie authors. But there are some things that we get out of publishing companies (as I wrote in the Atlantic piece) that your typical indie author isn’t set up for. Although, maybe I’m wrong about that. Anything is possible. And those things don’t have a right to exist (the Caro book everyone loves to trot out as an example, which I am also guilty of). But I would miss them if they didn’t. And I think we would all lose a little something.

    Ppps – I’m confounded by this Us vs. Them mentality I see when it comes to indie authors and publishers. They can both exist peaceably, even working together in many spots. Why the beef?

    • >>>>Ppps – I’m confounded by this Us vs. Them mentality I see when it comes to indie authors and publishers. They can both exist peaceably, even working together in many spots. Why the beef?<<<<

      Hi Mr. Greenfield – I wanted to answer this last one from my own experience of a writer who spent years in the submission part of the publishing trenches. I worked hard, was active in writers groups and learning my craft. I finally managed to get a respected NY agent. Despite definite interest we could never actually pull the trigger on a sale.

      After a year, several rejected manuscripts later, my agent and I parted ways. Those manuscripts sat on the shelf with nowhere else to go. The consolidation of publishing houses left me with no where else to submit – we hit them all and they said no.

      Laid off from my job, I took a look at Amazon and thought why not give it a shot. Maybe I can get gas money to go to job interviews. In the first month I hit the best seller list in my genre with three different novels. My "loss lead" made me a substantial profit in two months. Now I don't worry about gas money for job interviews because I write full time.

      I sent an email to my old agent telling her what happened. She was ecstatic and very happy for me.

      Then I hear this roar from the legacy publishing world that indie authors are going to ruin literature. We can't be successful, the ebook market will crash and die a miserable death because of us indies.

      My books are now competing for the same rankings as the legacy published authors I admired and who inspired me to write. That's a dream come true for me. I can pay my bills and I love what I'm doing now.

      I'm destroying literature.

      I don't like to see this us vs. them either, but because my manuscripts were rejected, obviously they're crap – but the readers are saying something very different. When the rhetoric of many in legacy publishing has that sort of vitriol, it's difficult to not see it as a straight out attack.

      If you aren't aware of it, hang out here and read through the posts PG has so kindly provided for us. You may be surprised.

      Cheers,
      Kathryn Loch

      PS – this is just my experience as an indie author. Others are different, but I just wanted you to see a facet of it.

      • Hi Kathryn–

        I love hearing stories like that. It’s inspiring and, honestly, makes me choke up a little. Your struggle, drive and success makes me want to work harder and be better at what I do.

        That said, why would any of that make you feel like books are a zero-sum game? The only thing I can think of is revenge against the doubters: “They didn’t believe in me; look where it’s getting them; they should go down.”

        Based on your writing here (and that’s not a ton to go on, but I will anyway), it seems like you are a reasonable, thoughtful person — not someone who has revenge in her heart.

        Moving on: Anyone who says that indie publishing is destroying literature is misguided and ignorant.

        I have a very harsh view of art. I think that most art is terrible. About 99%. Of the remaining 1%, most is decent and a very small percentage is great. And that’s true, in my opinion, both for “professionally” published books and books published by indie authors (who are, in many, many cases, also small publishing companies).

        So, yeah, I think most indie books suck. I’m a hater when it comes to what I spend my time reading. But I also think that most books published by publishers suck, too. About the same ratio.

        Listen: there are roughly 300,000 books that are traditionally published U.S. each year — give or take. How many of them were absolute must-reads? How many of them should be read 10 years from now?

        Undoubtedly, as many or more indie titles were published last year — and how many of them should be read 10 years from now? How many of them will go an your all-time top 100 or 500 or 10,000 books?

        And consider that a “power reader” reads 100-300 books a year. That’s A TON. I’m reading all the time and I read about 30-50. So, no one person can possibly keep up with a deluge of 10,000 new titles a year, let alone 300,000 or 600,000.

        Luckily, they’re mostly not very good so you don’t have to if you don’t want to.

        That I think addresses some of the main arguments people trot out for indie publishing destroying literature.

        Here’s one more: What if someone like you would have ultimately published something better, something genius even, if you had no other outlet and kept struggling and finally, one day, made it to a publisher and finally got the distribution you needed? What if working on your craft and pushing and pushing helped you achieve that height?

        First off, as you say yourself, you’re already working on your craft, as are thousands of others. The mantra of the successful authors — indie or otherwise — is to do just that. Second, you have to be incredibly naive to think that indie authors don’t use editors, consultants, etc, to put their work out into the world. And they will continue to do so — and will get better and better at it.

        Even given all that, let’s say that a handful of books that could have been truly brilliant get published before they’re ready or maybe could have really benefited from a specific world class editor working on it just don’t make it. Well, that’s one less book to throw on the pile of brilliant books most of us will never read. And, besides, this kind of thing has always happened. And, let’s be honest, publishers often get it wrong. How many times was Harry Potter rejected before it was published? Any books that miss the boat this way are probably being balanced out by titles that never would have gotten published if not for indie publishing.

        So, this notion that literature is somehow being destroyed by indie authors is lazy thinking. And, honestly, I’ve never really heard the argument put forward in a cogent way. I’d like you to send me links if you can find them.

        At the same time, being angry at publishers for rejecting your work is just a waste of time. And, honestly, indie authors will soon find out that they have common cause with publishers when it comes to dealing with retailers — Amazon and others. Today it’s the supplier known as Hachette. Tomorrow it’s Simon & Schuster, Macmillan and HarperCollins (in that order, I think). The small and mid-sized publishers have already been through this process and capitulated long ago. And then who is next to wring profit out of? Indie authors.

        Think that 70% is going to stick around in its present form forever? Just you wait.

        Best,
        Jeremy

        • Hi Jeremy,

          Thank you for your kind words. I appreciate it. And, likewise, you do not seem to be the type of person hates indies or small press or jelly beans just to hate. So, I really hope that you get a chance to search the articles posted in this blog because you will see time and time again what I’m talking about.

          Now, personally, I’m not vindictive with others but it’s easy to look at the Big 5 as – well – corporations. And I have to admit I have fun saying “neener neener”. Yet, these comments are coming from people like Turow – he’s saying stuff like this and he’s supposed be leading a group that represents authors.

          How about Donald Maas – big literary agent, he’s supposed to be representing authors but he says stuff like this:

          “Second, the self-publishing movement has been a boon to the print industry. Far from being threatened, print publishers instead are now gratefully relieved of the money-losing burden of the mid-list.”

          You can read that here http://jakonrath.blogspot.com/2014/02/fisking-donald-maas.html

          Not all indies are mid-lists. My books have outranked a couple of his clients, I know that. But everything changes because Amazon updates those numbers hourly. That terminology is outdated now.

          And all the links you need are right here on this blog. PG links to various articles and blogs in the industry, as he did with your article, and only comments on them now and then. The rest are here for our information. The information you want is right here, only a mouse click away.

          Honestly, my revenge is my success so I’m not saying they need to be burned at the stake because they rejected my books – that’s not my point.

          I feel like I’m getting attacked verbally, publicly, by industry professionals – they’re not writing that article to Kathryn Loch but they are attacking my profession and they are attacking my readers too.

          So, that’s why you’re hearing the harshness from me and others like me. I will defend myself and other indie/small press folks. These are industry professionals and they should be able to conduct themselves with decorum.

          I had to chuckle though because you mentioned art. I also paint – but not “art” as you’re probably thinking of, I have a commission business painting tabletop gaming miniatures and also the larger realistic equine sculptures. But when the books took off I had to put that stuff on the back burner. Still, I thought – it was funny you mentioned that.

          Honestly, I understand where you’re coming from in being harsh. Because I worked and learned, I have the toughest time. It seems I can’t read for fun anymore because I’m always analyzing, always in critique mode, then all of a sudden it seems like work! I’m disappointed in myself for that.

          And yes, I can say I’ve read indie books that suck! I have a few very dear dear friends and I tried so hard to read their books. But they don’t know their craft and I can’t get through the books. But those are the people I offer to help and tell them about conferences like the one in Vegas where they can learn.

          Bad writing isn’t exclusive with indies, I’ve also had many traditionally published books that went flying across the room because I got so fed up. That’s why I object to the legacy publishers being the self-appointed guardians. Legacy publishing is a business model. The Big 5 are there to make money not decide what makes good literature.

          Who decides then? The reader. Readers are the ones who make or break any author – not the publishers, not agents, not Amazon – the reader.

          And yes, I have a freelance editor and my numbers, which were already good, tripled after I hired her. But every good writer needs a great editor. So I gladly work with her on every book.

          I also have a professional cover designer, I a buy royalty free stock art for those covers from professional models. In fact, one of the most well known cover models in my genre just asked me to be conference director for his Author and Reader convention in Las Vegas. What am doing now is the exact same thing I would have been doing if I HAD been published traditionally. Except, unlike legacy authors, I have control over the covers, the edits, and the pricing. (I don’t break the bank hiring these folks too, prices are very reasonable and a lot less than what folks think.)

          That’s why I agreed to help with the conference. I’ve organized my share of them and wow – they are tough – but new writers, no matter which way they decide to go, traditional or indie, need to learn their craft and the industry as business. So I’m going to Las Vegas and will do everything I can to help.

          And it’s curious that you say this because after I parted ways with my agent, I put the writing down, walked away and didn’t touch it for about 3 years. I had a job as an accountant/office manager that was okay. Decent money but the stress was ridiculous. Was there for seven years and thought I had walked away from writing completely. I had enough of rejection letters.

          You work and work but everyone hits that breaking point. I had submitted to all of the publishers for my genre. They liked my stuff but that particular story didn’t pass the marketability litmus tests, we’d love to read a second if you would send it. So my agent did just that which why I had 7 full manuscripts sitting collecting dust. But after they rejected the second and said thanks but no thanks, I knew they wouldn’t want to read a third – so did my agent, that’s why we went our separate ways.

          So how many writers who are fantastic but who don’t pass that marketability litmus test do we lose to sheer frustration and rejection – there’s no one else to sell to.

          Then I got laid off and the job market is awful in my area. So I was having a hard time finding employment and that’s the only reason why I put my books on Amazon was because I figured they couldn’t do any worse there than they were sitting on the shelf collecting dust.

          Best darn decision I ever made in my life.

          My husband has been out of work since February and we’re surviving off of my writing income. I don’t like doing that way, business is business and things change, but we’re doing okay so far and I’m saving money for that rainy day.

          I have two degrees, one in Accounting and the other in Business Management, so I know it is entirely possible that Amazon will change the 70%. But watch Mark Coker jump all over that. What’s to stop us indies from jumping over to Smashwords en mass? Smashwords publishes to the Kindle as well. We’re not locked into contracts like legacy authors are, we can bail any time we want.

          Marketing and promotions, yup, I’m doing that too. I’ve participated in a bunch with other authors and gave away Kindles and Amazon gift cards and it cost me $20 because we all chipped in. And thanks to Amazon’s reporting I know exactly what my numbers were doing hours, a month, six months down the road. I know if that promotion worked or not.

          Honestly, I should be thanking legacy publishing for the rejections! lol! I truly don’t feel resentment about that, what I don’t like is the name calling and the nastiness that folks are throwing around. It is so unprofessional!

          But thank you Jeremy for posting and for reading and listening what I had to say. I really do appreciate that. I hope you hang out for awhile and get a first hand look. This blog is one of the best ones you will find on the publishing industry as a whole.

          Cheers,
          Kath

          • I’ve been a PV reader since I started at Digital Book World nearly three years ago. I know!

            I just wish there was less acrimony in the industry. We — authors, agents, publishers, booksellers, etc. — are all here because we love books. Shouldn’t that band us together? Or, at the very least, promote polite discourse?

            Back to Amazon-Hachette: I hope it’s not clear what I meant in the ATL piece. Let me know if you want me to clarify further.

            Best,
            jeremy

            • I agree with the less acrimony stance, Jeremy. Do you have any influence with James Patterson, Mike Shatzkin, and a few other big names in publishing? Could you get them to quit spewing the acrimony?

          • Love to hear your success story, Kathryn!
            –I have two degrees, one in Accounting and the other in Business Management, so I know it is entirely possible that Amazon will change the 70%. But watch Mark Coker jump all over that. What’s to stop us indies from jumping over to Smashwords en mass? Smashwords publishes to the Kindle as well. We’re not locked into contracts like legacy authors are, we can bail any time we want.—

            And even if Amazon takes more of the pie, I suspect they will be smart enough to offer enough in ease of publishing, other services (I totally expect, if they continue to be sharp about it, for them to offer BETTER self-pub services) that even if they reduce what they pay to 50% or 40% that they will keep ahead of the competition. I think they want to be the place to go for indie authors. And 50% is still better than any Big5 gives for ebooks.

            Options = good. I’d love to see Amazon get more competitors catering to indie authors. 😀

            • Thank you, Mir! And I agree with you. Amazon already offers the cover creator and now KindleGen works with Adobe’s In Design for formatting.

              It’s not just this industry and Amazon with a push toward the smaller businesses. I’m seeing high end 3D computer programs, once only affordable by Hollywood production companies, dropping significantly in price in order to work with the indie gaming and graphic art devs. It is definitely interesting.

              And as a disclaimer, let me throw out there that I was simply responding that one last ppps that Jeremy made, I didn’t mean to kick the thread off the rails. 😉

        • I agree completely. The core issue in this story has nothing whatsoever to do with whether or not authors are mis-treated by, or need, traditional publishing houses.

          It has everything to do with whether all publishers, including self-publishing authors, are going to be able to make a profit while selling through Amazon, as the terms of each group’s deal are re-negotiated in turn.

          It also looks at the POTENTIAL impact if Amazon’s management made a merchandising decision that it would not carry a particular type of book (whether it focused on a scientific theory it didn’t like, a political stance, or whatever).

          Every retailer has an absolute right to decide what merchandise it will and will not carry. Every information outlet has an absolute right to decide on an editorial direction. Between the two, there’s no way that I can see, as a non-lawyer, that anyone could force Amazon to sell, or to stop de-emphasizing, any particular type of book, or any particular (type of) publishers’ books.

          Given the current market share that Amazon has, and the trends in that direction, these two issues are a lot more important than old grudges, in my opinion.

  47. Wow, some really great commentary PG. At the risk of being burned in effigy I do want to just provide a bit of a counter balance. I was very successful with self-publishing and there is no doubt that my career was benefited when I signed my traditional contracts (with Hachette, fwiw). I don’t want to see publishers disappear…I want them to change. There are many authors that NEED publishers, not all of us are cut out for the rigors of self-publishing. I’m lucky I can do both, but there are many authors that whose voices will be lost, and I lament that loss just as I do all the voices that were silenced before self-publishing found traction.

    So while I may be naive in thinking the devil can be redeemed, I do think that authors are best served when we can have those that go indie and those that have the CHOICE to go traditional. I just think that without them too many talented authors would not be able to survive on their own…so for their sake’s I hope their situations improve.

  48. Well said PG! 🙂

    This was a comment I posted on Hugh Howey’s site – and I’ll probably expand this into a longer post sometime soon…

    “In my opinion, it’s great the Passive Guy is coming out fully on this. Similarly, I was on the fence about the Big 5/Legacy Publishers as they do fill a certain niche and do some good for a lot of authors (editing, covers, promotions, etc.).

    However, I think Hachette and the mainstream media have crossed a moral event horizon here – and the fact that the monopolists are being straightforward about their intentions gives all a clear indication where we stand. Hachette is the enemy of all indie authors, publishers, and bookstores. Their arguments against Amazon pertain to all non-chain bookstores, all indie shops, all discounters, all publishing platforms – and their intentions are to stop it all to maintain their stranglehold.

    They’re bringing out the big guns here – getting authors, TV personalities, and media to smear and defame Amazon. Patterson and Turow even talked about getting the government involved – the same government that hates the online market and believes that there are corporations “too big to fail.”

    In other words, I think all us indie writers, etc., should be afraid and wary. The bad news is that the gov’t is likely to legislate on this, basically putting indies all over in a major bind.

    The positive thing about this? The Big 5 (and Turow, Patterson, Colbert) aren’t even pretending to be on the side of authors and entrepreneurs. I hate to sound volatile, but they are now the enemy and we should not be passive about this.”

    I agree with PG here – indies need to get ready. We all should’ve known that the Big 5 were not done after the collusion verdict. They’re basically at war with indies – we cannot forget that.

    • Chris, Amazon is the monopsony here. They have 40% of all trade book sales, and 65% of all ebook sales in the US. For most author-publishers, the power relationship is even more lopsided: Amazon controls 90% of sales, or more.

      Publishers are not a monolith. They’re in competition with each other far more than they are with you. The largest of them has only 25% of all book sales. Hachette has 10%.

      Do not confuse Amazon with an ally. It’s not. It’s pursuing its own profits, without care for or interest in your profits. For the MOMENT, Amazon’s offering you a great deal.

      Expect that to change as it has for small publishers and self-publishers who focus on print books. Drastically, and without warning. There’s no reason on Earth why they wouldn’t do that to you, as they have to every single other class of publisher, most of them more than once.

      Look past the other issues you have with the publishing world. On THIS issue, you’re in the same boat as all the other 100,000 publishers who own their own ISBN blocks in the US.

      • Marion, you are right when you say: “Do not confuse Amazon with an ally. It’s not. It’s pursuing its own profits, without care for or interest in your profits. For the MOMENT, Amazon’s offering you a great deal.”
        But as you said yourself, at the moment, Amazon IS offering us a great deal, while trade-publishers ARE NOT, and that is what is at the moment important. And as you pointed out, “ you’re in the same boat as all the other 100,000 publishers who own their own ISBN blocks in the US.” where the emphasis is: self-publisher are in the same both as the other 100,000 publishers, not trade-published authors and that is our advantage. When/if things change and Amazon stops offering us a great deal, since we still own our copyright, we have a option of packing our wares and leave, something that an author tied with a contract to a trade-publisher can’t afford, and this is, for me, a main advantage of self-publishing and the reason why I’m not that worried about Amazon.

        • Elka, you are confusing Amazon, the RETAILER, with a printer or distributor, or other service company.

          They’re JUST A STORE. The problem is that THIS store is so central to most authors’ strategy that self-publishers have come to identify this STORE with the whole phenomenon of self-publishing.

          This is an error with dreadful potential for painful consequences.

          • I don’t know where you got a feeling that I’m seeing Amazon as printer or distributor?

            Yes, Amazon is a a store, and even though they do have a big chunk of the market, they are only one of many, and since they were the ones who heavily influenced the boom of e-book market, you are right, “self-publishers identify this STORE with the whole phenomenon of self-publishing.” So? I don’t get why this is “an error with dreadful potential for painful consequences.”

            From your comments is evident that you are worried about what Amazon might do some day, which is in my opinion a waste of time. Amazon is a business and as such it would will do what all business do, what’s best for their bottom line. And I will do the same, that’s why I’m not in KDP Select.

            I got the feeling that you are equating self-publishers with trade-published authors, who when they sign a contract lose the control over their IP and what happens to it, and the only way out is to buy their rights back or to sue their publishers. Self-publishers approach Amazon as a publishers, not as authors, and even though we don’t have clout as trade-publishers do, we are in much better position than trade-published authors, which was evident by reactions of Hachette’s authors, who have via their blogs displayed (even thought I doubt that was their aim) how depended their livelihood is on good will of their publishers and their publisher’s relationship with retailers.

            If you are not aware of, Amazon as retailer had already hurt self-publishers via shoving their erotica book into the dungeon, but so did Kobo. And B&N, where I sold more than I did on Amazon, hurt my bottom line personally, when it changed algorithms in favour of trade-published titles, because of which my sales come to abrupt stop. But I, and I suspect many self-publishers, take such changes in stride, adapt and move on.

            • Elka, self-publishing authors (of trade books) ARE trade publishers.

              I read your post through the filter of all the ones I’ve been reading lately, where the author forgot that fact. I gather that you’re very aware of the two different roles (author and publisher), and the fact that you need to switch between them, in order to maximize your readership and your profits.

              Yes, I’m afraid of what Amazon (or any other business in its position) will do. The logic is inescapable.

              And, yes, all of the different stores have done things that have harmed one or another segment of publishers (including self-publishers) at times.

              The difference here is that self-publishing authors tend to avoid thinking about strategy and tactics and contingency plans.

              Amazon recognizes that there’s less profit to be taken from the self-publishing community than from the Big Houses, so they start with the bigger ones. They always have. But then, they get around to squeezing the smaller houses, and last, but always coming, they get the self-publishing community.

              But they’ve always gotten around to squeezing the self-publishing community before. Now that ebooks have come along, and this segment is bigger, if not perhaps, making more per author or per title, I suspect that the frequency with which the self-pubbers get squeezed, and the degree to which they get squeezed to go up, not down.

              • self-publishing authors (of trade books) ARE trade publishers.
                That doesn’t make sense.

                I don’t share your sentiments or your fears, not because I believe that Amazon can do no wrong, but because I have faith in self-publishers that if Amazon or other retailers do something, they would do what’s best for them. Whenever I hang out around other self-publishers, the two most common advices are (beside write new books, edit them and slap a guilty cover on it) have a new release mail list and don’t put all the eggs into one basket, so I don’t agree with the. “The difference here is that self-publishing authors tend to avoid thinking about strategy and tactics and contingency plans.” As I see it, self-publishers, the serious ones who want a career out of it, are all about strategy and tactics that would enable their career on a long term.
                If I’m right or wrong, we will see what the next few years will bring.

                • Everyone gathers a mailing list, no matter what type of publisher or author they are. And that is helpful.

                  That’s a MARKETING tool, not a retailing one.

                  Once people on your list decide to buy, the question then is where they’ll buy. The vast majority will refuse to buy from an author directly, even if that’s the only way to get the book they want.

                  It’s a sad fact, but it’s a consistent one, across many types of author, many types of books, many formats of books, and so on. It’s even more true for ebooks than it was for print.

                  BTW, very large publishers have a slightly better ability to garner those sales, but not much. It’s another way in which all publishers are in the same boat.

                  I have faith in the creativity of authors and small presses, too. It’s one of the reasons I left “big publishing” to consult with the micro-presses (successful self-publishers and the houses selling less than $10 million per year).

                  The best of them do a fair bit of tactical thinking. I have yet to see much discussion of strategic thinking.

                  On THIS issue, failing to get an approach that will support you and your books through 6 months or a year without access to Amazon looks to me to be likely to cause a problem. Not a possibility, but a probability.

                  In any case, having other avenues that provide substantial sales shouldn’t harm your Amazon sales in the slightest, so it can only help you. Why NOT follow my advice, and go find those avenues?

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