Home » Amazon, Big Publishing, Non-US » New Amazon terms amount to ‘assisted suicide’ for book industry, experts claim

New Amazon terms amount to ‘assisted suicide’ for book industry, experts claim

25 June 2014

From The Guardian:

British authors have condemned as “deeply worrying” reports that Amazon is now pressing for improved terms from publishers in the UK, as its showdown with Hachette in the US continues to be played out in public.

According to book industry bible the Bookseller, to whom UK publishers spoke on condition of anonymity, Amazon is putting publishers under “heavy pressure” to introduce new terms. The Bookseller reports that these include the proviso that “should a book be out of stock from the publisher, Amazon would be entitled to supply its own copies to customers via its print-on-demand facilities”, and that “books cannot be sold for a lower price than Amazon’s anywhere, including on a publisher’s own website”.

The Bookseller’s editor Philip Jones said the ongoing negotiations “indicate a direction of travel that would see [Amazon] take a sizeable control over both a publisher’s inventory and its marketing”, and that “publishers spoken to – and obviously they will only speak on condition of complete anonymity – have every right to be concerned. This is a form of assisted suicide for the book business, driven by the idea that publishers are a sickly lot unable to run even the most basic operations efficiently.”

. . . .

Although it is publishers who are currently feeling squeezed by Amazon, Solomon said the negotiations also “threaten” published authors. “Despite increasing profits, publishers are increasingly under pressure: they say, rightly, that even bestsellers tend to sell fewer copies than in the past (now readers have such a wide range of choice); their budgets will be under further pressure if they have to concede larger discounts to Amazon and pay for ‘services’. Authors will suffer as publishers claim that paying large advances is increasingly risky and, of course, authors are traditionally paid less on print books if publishers concede high discounts. On ebooks they are paid a proportion of net receipts so higher terms for Amazon will result in less money going to authors,” said Solomon.

The changes, she said, “highlight one wider, and growing, trend across all publishing and bookselling. Namely, that the author is the only 100% essential component in the creation of a book. But retailers are taking a larger chunk of any income, and publishers are taking a larger chunk of any income, so the share of income which makes its way to the author is forever shrinking.”

Link to the rest at The Guardian and thanks to Abel for the tip.

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Amazon, Big Publishing, Non-US

52 Comments to “New Amazon terms amount to ‘assisted suicide’ for book industry, experts claim”

  1. Authors will suffer as publishers claim that paying large advances is increasingly risky …

    Wait. So authors are getting large advances now? Fascinating, as a certain pointy-eared fellow would say.

    • I thought the same thing. I’m beginning to think that trad midlist authors who stick stubbornly with this game are the ones committing suicide. Am I wrong, or is going indie the only way to make a few bucks? If not yet, it’s certainly coming.

  2. Funny how they call it “assisted suicide”. I mean, self-publishers have to deal with the pricing restrictions, already, and it isn’t exactly hurting them…

    • It was my impression that Amazon doesn’t force a lower price on a publisher, but rather insists that it not be lower anywhere else. If it is, Amazon will adjust to the lowest price the book is offered anyplace else.

      If that is the case, it simply means that Amazon ill not be undersold by anyone. I don’t see how this is unfair.

    • I think it’s called “Death with Dignity” these days.

  3. To us, it makes little difference whether or not Amazon is the Evil Empire. The handwriting is on the wall. Publishers will get squeezed.They’ll pass that loss onto–who else?–the authors. The more we control our own destinies, the better off we are. Even if Amazon decides to put the screws to us, we can sell direct from our websites or other online retailers. Not a great scenario, but at least we’re not working for a pennies a book.

  4. I just had a thought-could it be that Amazon wants money for “services” because they intend to offer the same to indies instead of just giving these special treatments to big publishers exclusively? Of course, they want to charge to raise money–they’re a business–and few indies might be able to afford their rates; BUT maybe this is only a precursor to taking advantage of what they can offer to whoever is willing to pay, big pub or small or indie…We can hope for a more level playing field.

    • A level playing field? Is there really an indie out there that could match the ‘placement’ fees of a Stephen King or Donna Tartt launch put up by a Big 5 publisher? Does anyone know how much those promotional goodies cost?

      • True, but the field was even more precarious when I was published traditionally.

      • I doubt many independents would match a King debut. But they could easily afford a reduced scope for reduced exposure. I would be happy to pay for promotion on Amazon. I’m content for King to spend more and get more. Pleae, please don’t throw me into that briar patch.

    • If Amazon wants to offer me a banner or targeted email with a dedicated link and take 70% of the sales going through it, I’d be all over it.

      • THANK YOU SIR MAY I HAVE ANOTHER?

        – My response to a theoretical offer of this type

        • And that’s all it is. It was just a thought that passed through my head. Maybe Amazon has plans to offer different levels of promotions to all levels of publishers, not favoring the big pubs with the deep pockets. Whether smaller pubs or indies could afford such services would be another matter entirely.

      • Amazon already does this for free for indie authors. Here is an email I got from Amazon yesterday. (Links removed, but every book was linked to its Amazon page.)

        William Ockham,

        Are you looking for something in our Mystery, Thriller & Suspense books department? If so, you might be interested in these items.

        Mystery, Thriller & Suspense books

        Victorian San Francisco Stories
        M. Louisa Locke

        Price: $2.99

        Dandy Detects: A Victorian San Francisco Story
        M. Louisa Locke

        Price: $0.99

        Matrimony, Money and Murder
        Cindy Bell

        Price: $0.99

        Mussel River Blues: A Redneck Detective Agency Mystery
        Robert J. Steele

        Price: $2.99

        Bloody Lessons: A Victorian San Francisco Mystery
        M. Louisa Locke

        Price: $4.99

        Queen of Poison (Lily Bloom Cozy Mystery Series Book 2)
        Lyndsey Cole

        Price: $0.99

        The Dead Among Us (A Peter Ainsley Mystery)
        Tracy L. Ward

        Price: $3.99

        The Misses Moffet Mend A Marriage: A Victorian San Francisco Story
        M. Louisa Locke

        Price: $0.99

        Honeysuckle Homicide (Trash-to-Treasure Crafting Mystery Book 2)
        Rose Pressey

        Price: $3.99

        From the Ashes (A Ravenwood Detective Agency Mystery Book 1)
        Sabrina Flynn, Merrily Taylor

        Price: $2.99

        Maids of Misfortune: A Victorian San Francisco Mystery
        M. Louisa Locke

        Price: $3.99

        These authors could not hope for a better ad. I am their ideal customer. Amazon does this to get me to buy more stuff, but those authors are essential to Amazon’s efforts. I doubt that the authors involved even know that this email went out. The email isn’t designed specifically for me (Amazon knows that I own some of those books), so I assume that email went to some number of people.

    • It could also be that this leak is complete bunk.

      • Yep.

        I’m still not convinced that the Secret Squirrels who are anonymously “leaking details” are actually doing anything of the sort.

      • That was my thought as well, Hugh. These are “leaks” by anonymous people. Given the public disinformation going on by Hatchette, how much less can we trust supposed leaks from them to have much truth to them. This all sounds like further one-sided spin to me.

        I’ll wait for the official release before biting, thank you.

      • This is the way I see it too. An anonymous source in the industry? There’s just NO WAY they’re not going to be drastically misrepresenting Amazon and what Amazon is asking for. Especially because they are anonymous and therefore cannot be held accountable for what they say.

  5. The final paragraph of the excerpt resonates on so many levels.

    • … the author is the only 100% essential component in the creation of a book.

      It’s so obvious. And yet, people in the publishing industry keep missing it. And, sigh, the authors themselves can miss it, too. But more of them are seeing the light so there’s that.

  6. News Flash: Traditional Publishing in Death Throes. In other news, birthday candles can cause burns.

  7. But retailers are taking a larger chunk of any income, and publishers are taking a larger chunk of any income, so the share of income which makes its way to the author is forever shrinking.

    If you’re working on a submission letter right now, head on over to KDP and do a little research first…

  8. “Assisted?”

    So they admit they’re killing themselves?

  9. Wait… why is it a problem for publishers if Amazon supplies POD copies for out-of-stock books?

    Yeah, I can see it now, your customers are satisfied even if you have supply line problems. Curse you Amazon! Those customers are supposed to WAIT! Or buy something else!

    • Rights issues etc.?

      I saw mention of this the other day and did a double take. I definitely think this is a spot for [citation needed].

      If it’s true, what’s to stop them from, for example, in this particular situation with Hachette, saying “Well, we’re just not going to order your books anymore. We’ll wait until somebody buys them and then order them. And hey, if you can’t get them to us quickly, we’ll just print them ourselves and ship them.”?

      • Um, a contract that defines what ‘out of stock’ means?

        Oh, you mean the publishers believed Amazon when they said ‘don’t worry your pretty little head, it’s just boilerplate, we’d never enforce it, diddums’, as publishers have been saying to writers for years?

    • I agree with Will that I think there’s a rights issue involved. Seems to me Amazon having the capability to POD means that no books would ever be considered out of print which could be problematic for authors hoping for rights reversions down the line. I know with kids books sometimes they give a license to Scholastic to print their own copies — so would the publishers be giving Amazon a similar license? Is that contemplated in the publisher contracts with authors?

      • Yes, every author should make sure that POD is excluded from their contractual definition of ‘in print.’

    • When Amazon begins to print publishers’ books, the value of a publisher to an author falls. The publisher’s competitive edge has been producing and moving paper. If Amazon can do the same with just a computer file, that is one less factor the publisher can offer. His value to an author falls.

      However, some publishers will take this deal. The structure will determine if those publishers will have a competitive advantage over other publishers.

      The publishers who take the deal will no longer have to finance printing.

      • You nailed it.

        All of those other issues are things to be negotiated, but the problems are not inherent in what Amazon wants. The problems are inherent in how the publishers do business.

        And Amazon is pressuring them, and will continue to pressure them, to upgrade. That’s not Amazon being evil. That’s Amazon being realistic.

        And yes, the authors will be screwed because that’s what publishers do to authors. And yes, authors have got to stop signing these contracts.

  10. Another one of kr’neki. (kr’neki = whatever, with added roll of eyes)

  11. “[B]ooks cannot be sold for a lower price than Amazon’s anywhere, including on a publisher’s own website.”

    No way, no how, is Amazon negotiating for this. MAYBE no direct sales undercutting. But Amazon, unlike the Price Fix Six, is not stupid. The only way for this clause to be enforced as described would be for publishers to deny the ability of everybody else to discount lower than Amazon does. There’s a serious anticompetition lawsuit just WAITING to happen. The fact that something this ludicrous is reported as straight fact immediately throws the entire article into doubt.

    • Uh, I do believe that is why Baen raised their prices and set sunset dates on their monthly bundles.
      What they are doing is misrepresenting Amazon’s price matching terms. Instead of insisting upfront on MFN, they want the right to match the price at any other retailer by reducing the publisher’s cut.
      Remember how it has been suggested that Hachette (and the other conspirators) might lockup Amazon in a no-discount agency contract and then give better terms to Apple and Google? This clause is insurance against that.
      They are doing the “trust but verify” thing.
      Which, of course, is another way of saying they don’t trust the publishers.

      Now, why would they trust them?

      • What you said, I could totally believe. And I’ll admit that what the alleged leaker said would theoretically read on that. But that’s NOT what’s being implied in the original article. It’s very misleading, at the very least.

  12. Assuming it’s not all just spin and propaganda, there is still this to consider:
    http://www.youtube.com/watch?v=q3CLc0IGstk

    12-15% to the creators and less than 30% to the people who do the actual marketting and selling and delivering? Unsustainable.

    Pbook economics run a lot closer to a fair split at 45-50% discount so why shouldn’t Amazon want a similar split from the people actively trying to take their business away and give it to Apple? In 2010 books made up a bigger portion of Amazon’s business than today and BPH titles made up a bigger portion of their book business than today. And, thanks to the conspiracy, Amazon’s competitive position is a lot stronger than ever.

    What if *this* is the storm?
    A preemptive strike before the rest of the industry consolidates into a size big enough to be a nuisance? Break the cartel now and push more authors to go hybrid so the cartel never reforms.

  13. “…driven by the idea that publishers are a sickly lot unable to run even the most basic operations efficiently.”

    Sounds like a fair assessment to me.

    “…retailers are taking a larger chunk of any income, and publishers are taking a larger chunk of any income, so the share of income which makes its way to the author is forever shrinking.”

    Except for those who publish via KDP.

    • But that is because they are both author and publisher.
      But even there, the publisher pocket gets all the dough and the author pocket gets shorted. 🙂

  14. I’m thinking the first line of the article needs some help….

    “British authors have condemned” should read, “Some British authors have condemned”.

    The reactions of other authors around the world, British and otherwise, include unconcerned, neutral, still deciding, don’t care, glad to see the hypocritical exploitative trad pubs knocked down a notch or two, ……

    Granted, not as catchy and sensationalistic as implying that all authors have condemned….

    • “British authors have condemned” should read, “Some British authors have condemned”

      On that note, I think this article was written by someone who has parachuted into the topic. It shows no depth of understanding. One tell: the line about the advances had no context, no “average advance” enumerated, for example, let alone broken out by midlist vs. bestseller. Another tell: no mention of what “out-of-print” in relation to POD could mean for a writer’s contract.

      The final tell: She quoted a lot of “talking heads.” That is, industry figures she could easily Google and get a quote from. But to your point about British authors, did you notice who isn’t quoted? Writers.

      Finding writers to quote would take substantially more effort, and to know what questions to ask would require far more background knowledge than the reporter currently displays. The reporter is probably assuming that a publisher’s interests and a writer’s interests are always congruent, and what’s a problem for a publisher is necessarily a problem for the writer.

      I’m betting the concept that there there are issues that would concern a writer independently of the publisher is an “unknown unknown” to the reporter.

      Of course, I’m giving the reporter the benefit of the doubt 🙂

  15. Ah, yes. Ensuring your customer gets their book in a timely manner. The worst business practice ever. Certainly seems like assisted suicide to me.

    Oh, wait. Readers aren’t the customer? Bookstores are? Silly me. Yes, POD would certainly destroy the choke-hold publishers have on the industry by removing the necessity of a long chain of distributor middle-men. You know, this wouldn’t be such a big damn deal to them if they’d ever bothered to acknowledge that READERS are their customers, not STORES.

    P.s. Very amusing how suddenly they’re all so concerned with how this will impact authors. All this hand-waving over advances dropping (like they’re not already total crap) but no mention of how authors would ACTUALLY be negatively impacted by this: namely, in never getting their rights reversions, since these books will now never go “out of print.” Nope, keep the real kick in the nuts to authors under your hat, and instead cry those crocodile tears over the advances that won’t even make you one mortgage payment these days anyway.

    I’m so sick of these assclowns.

  16. Help me understand this demand of Amazon’s: “books cannot be sold for a lower price than Amazon’s anywhere, including on a publisher’s own website.” I know i am missing some critical piece of this, but isn’t amazon itself routinely undercutting the book prices of big publishers/brick and mortars? If so, it seems strange they require everyone else to agree never to do that to Amazon would be entitled to supply its own copies to customers via its print-on-demand facilities”, and that “books cannot be sold for a lower price than Amazon’s anywhere, including on a publisher’s own website Aamazon… and why would Amazon even fear being undercut when no one else seems close to doing that?

    Thank you,

    S

    • First – As pointed out above, it most likely refers to Amazon’s price-matching policy. If a book gets discounted elsewhere, they match the discount and adjust the publisher payout accordingly. This is old practice with indies and small and medium publishers with wholesale contracts.

      Second – It is myth that Amazon always has the lowest price on everything. Always has been. Especially on ebooks. Pre-agency it was common to find specific books priced lower at other ebook sites (through sales, loyalty rebates, coupons etc). It is why non-ideologues saw value in epub interoperability: the chance to shop around. The consensus was that if you only bought ebooks from one store, then Amazon was in aggregate cheaper by far but if you were willing to shop around, you could find better deals. Agency killed that. It killed most of the smaller ebookstores, cut Nook’s share, and stalled kobo’s US growth, and thus pretty much killed interoperable epub in the US.

      The BPHs have made it clear they want to shift market share from Amazon to Apple and B&N and Amazon is looking to make it painful for them to do it. Price matching at publisher expense achieves that.

    • Keep in mind, this is in large part spin. They are leaving out the price matching part of the deal. It isn’t that they can’t sell for a lower price elsewhere, but if they do, then they’ll price match it. But they are framing it in terms that Amazon is saying they can’t, period. Which would be crazy for Amazon since that would likely end them up in court because it would be a form of price fixing and preventing competition. I doubt Jeff is dumb enough to fall into the same trap the “Big 5” did.

      So, like Felix said, this is likely referring to price matching, not price fixing, if it has any validity to it at all. Something they’ve been doing with indie publishers for years now. The point being to prevent publishers from selling high to Amazon while cutting super deals with Apple and B&N. Amazon knows the traditional publishers see them as the enemy and are protecting their business.

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