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Authors United’s Divisive Stand on Amazon

6 February 2016

From Publishing Perspectives:

Last Wednesday’s (January 27) Authors United event on Amazon and book publishing had a curiously provincial air about it. It was staged at Washington’s New America Foundation, a nonprofit think tank that includes “impartial analysis” in its description of its work. The event’s loaded title, “Amazon’s Book Monopoly: A Threat to Freedom of Expression?”, suggests that New America’s grasp of impartiality may be partial, but the intent here was to state that Amazon’s market position will, as one participant put it, cause “long-term effects on the global book trade.”

The question of whether Amazon technically has a monopoly in the marketplace, of course, is unsettled. It’s something that some of our colleagues find endlessly discussible. And Amazon’s vast size matters here, both in animating this circular debate and in that quality of provincialism. At many points Wednesday, the event—ably webcast live by New America—looked a bit like earnest but presumptive town folk complaining that a rural electrification program might harm the tranquility of the pastures. This is always a risk, of course, when we take on so large an entity as the Amazonian estate.

. . . .

“For the year, Amazon passed $100 billion in revenue for the first time in its two-decade history. It took rival Wal-Mart Stores Inc. 35 years to reach the same mark in 1997, two years after Amazon.com opened for business.”

And contextually speaking, one of the hardest things for some publishing people to do is to keep in focus the fact that Amazon is vastly more than books and publishing. It’s more than lawnmowers and dog beds, too. Its AWS operation, Amazon Web Services, has “a huge lead on rivals in offering cloud-computing services,” Bensinger writes. As a tech company—and that’s what Amazon is—it “easily” outperformed in 2015, writes Bensinger, “other tech giants like Alphabet Inc., Apple Inc. and Facebook Inc.”

. . . .

All of which throws a huge shadow over events like Wednesday’s in which detractors gather to rail at the feet of a colossus.

Authors United, earnestly led by novelist Douglas Preston, was established at the time of the Amazon-Hachette contract-renewal standoff and remains one of the most polarizing efforts in the author camp. It’s seen by many in the self-publishing world as a consortium of bestselling trade authors who place their interests in establishment publishing over the value of opening the market to independent publishing, as Amazon has done. And one of the things that has dogged the United group from the beginning, of course, is that its author-members sell their books through Amazon. In that light, the hand that feeds them looks sorely bitten each time they mount a complaint. Anyone can understand how tricky this circumstance is in such an event as Wednesday’s.

Link to the rest at Publishing Perspectives

PG says this piece highlights how pathetic the Authors United group are and how deeply needy their relationship with their publishers has become.

Remember how AU came into being. After having their hands slapped for a comically inept conspiracy to illegally fix prices by the Justice Department, the business geniuses of Big Publishing moved their price-fixing plans forward one by one as their existing contracts with Amazon expired.

Hachette was first up in the renegotiation of its contract with Amazon. The old contract provided that Amazon would set the price for ebooks, but would pay Hachette amounts based upon Hachette’s list price for ebooks. This provided a direct financial benefit to Hachette and to Hachette’s authors.

For some reason, the aforementioned business geniuses of Big Publishing thought they understood more about pricing ebooks than Amazon did, so Hachette insisted that Amazon must quit selling Hachette ebooks at a discount and, instead, sell them at the price Hachette specified.

Hachette has no problems with Barnes & Noble selling printed books at discount, but ebooks were different – new and strange – like websites.

But the executives convinced themselves over cocktails that they knew the proper price for online digital goods and Amazon didn’t. Besides, they never trusted ebooks even though their accountants patiently explained how much more profit they could make by selling electrons instead of dead trees. The fight went on for awhile and Amazon became nervous about selling Hachette ebooks without a contract in place and either quit or slowed down orders for Hachette ebooks.

The AU folks diligently studied the Constitution and antitrust laws and discovered that the founders of the nation had granted traditionally-published authors a divine right to have Amazon sell their books. Why? Because Amazon is better at selling books than anyone else. So Amazon has to sell Hachette books, contract or no contract.

Eventually, Amazon gave in and Hachette set ebook prices higher than Amazon recommended. All of Hachette’s co-conspirators did the same thing.

To AU’s surprise, instead of increasing, sales of tradpub ebooks declined! Who knew that sales had anything to do with prices?

It’s all Amazon’s fault. First, Amazon would not set ebook prices as high as Big Publishing wanted them set. And authors were harmed. Then, Amazon would set ebook prices as high as Big Publishing wanted them set. And authors were harmed.

The only reasonable conclusion for AU is that Amazon is plotting to harm authors. And books. And the writing life. And culture. And New York. And, probably, baby seals too.

In PG’s dream world, Amazon would quit selling all books published by Hachette and the other antitrust outlaws (computer problems!) until each Author’s Union member traveled to Seattle and kissed each of Jeff Bezos’ toes. Three times. And petitioned the Vatican to have Jeff declared a saint. And built a cathedral in Manhattan named after St. Jeff.

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34 Comments to “Authors United’s Divisive Stand on Amazon”

  1. The masters’ lapdogs are told to ‘sing’ and they yowl and howl away, hoping for a treat from said masters.

    Sadly for the rest of those that can hear, it’s just painful noise on or ears, so we do our best to tune them out — which displeases their masters who demand they howl all the louder … too bad the mutts haven’t figured out their masters have no treats for them (and if they take their act on the road they’re liable to get rocks, bottles and old shoes thrown at them!)

    Happily most of the noise is centered in the New York area, so the fly-over-states and the west hardly notice it.

  2. PG, you write: “…the business geniuses of Big Publishing moved their price-fixing plans forward one by one as their existing contracts with Amazon expired.”

    So instead of doing it collusively (is that a word?) and running afoul of the law, we now have the same agency pricing, except done one by one.

    I call it shadow over substance. The legal types had their way, the courts weighed in, and the Five got their collective handslap. Yet either way, agency pricing kicked in, one at a time instead of all at once.

    Tell me how the outcome is any different than if the DoJ had turned a blind eye to the antitrust violation?

    Furthermore, agency has not turned out as advertised for the conspirators. Gotta be the ‘Zon’s fault!

    Yeah, uh-huh. Right.

    • ” shadow over substance.’

      very smart way to say it

    • “Tell me how the outcome is any different than if the DoJ had turned a blind eye to the antitrust violation?”
      The difference is one way is illegal and the other was a negotiation between the two parties. It was clearly stated at trial that neither agency or MFN was illegal. The manner of establishing it was.

      • Plus, the second time they didn’t leave a trail of collusion documentation as deep as the Marianas trench.

        I still think Amazon has been “br’er rabitt”-ing those fools for the last six years. They still don’t see how their moves simply make Amazon stronger than it ever would’ve been if they hadn’t colluded.

    • I still think Amazon should ‘agency’ their books right along with their ebooks. And for added fun, they shouldn’t ‘recommend’ any books or ebooks out of their suggested price windows.

      What would really hurt the publishers (and the writers in their pens) is that there wouldn’t be a single thing for them to take to the public or the DoJ. They set the prices, they can die by the prices — and being now able to undercut Amazon won’t save B&N.

      Amazon could have fun with it, maybe only have the books ‘on sale’ one week out of the month (but you’ll have to really want the book to keep checking — no warning or update that the book price has changed.)

      Will Amazon do these things? most likely not as they are there for the buyer — not the seller (as the publishers and their mutts are whining.)

      And you knew Publishing Perspectives had their ‘we’re for the publishers’ hat on (and then their heads up their a$$) with this line:

      “The question of whether Amazon technically has a monopoly in the marketplace, of course, is unsettled.”

      And then there’s:

      “Authors United, earnestly led by novelist Douglas Preston, was established at the time of the Amazon-Hachette contract-renewal standoff and remains one of the most polarizing efforts in the [author] camp.”

      Here they can’t even tell the difference between authors and their publisher masters it seems …

    • I suspect that this particular collusion was far from the first conducted by major publishers, Deb. For example, they all reduced ebook royalties from 50% of net to 25% of net at essentially the same time. Of course, this has been hugely detrimental to traditionally-published authors.

      One positive outcome could be that Big Publishing might hesitate, at least a bit, when considering future cozy dinners to fix royalties, prices, etc., in a way that avoids any unseemly competition among the aristocracy.

      • Heh, another thing that the Hachette-Amazon battle showed is that they believe that they have to stand together or divided they’ll fall.

        After all those months (and all those lies) of Hachette standing firm, they quickly gave in when one of the others signed a contract with Amazon.

        I’m expecting that one of them will soon be giving in on the overpriced ebooks, and when they do the others will follow like not-so-little mutts with their tails between their legs because they know they’ve gone done a ‘bad thing’ on the carpet again …

        • Perhaps, but now they have contracts forcing Amazon to sell only at the prices they’ve set. If they want lower prices, they have to eat the difference rather than letting Amazon take a hit in return for a chance to sell tv’s and tuscan milk.

          • Yeah, ain’t it a shame that the publishers will have to eat their mistakes? Agency, the gift that keeps on giving!

            The only sad part is the writers that trusted those same publishers are given the shaft both by the high prices and by the low royalties for ebooks …

      • It does seem that in the future Big Publishing will have to be a little more careful how they proceed to avoid conspiracy charges.

        And while I personally don’t believe Apple was legally in the wrong (per se violation and horizontal vs vertical conspiracy), had the original deal gone unchallenged, and the big five had moved in a block to force Amazon to the table (without courts looking over their shoulder) who knows what they could have demanded.

        Perhaps their dream of forcing self-publishers to be listed in a separate search ghetto. Could have been ugly.

  3. It’s remarkable how the concept of shame has evaporated from the modern world.

  4. The question of whether Amazon technically has a monopoly in the marketplace, of course, is unsettled.

    Is it unsettled? I thought it was pretty clear that they do not meet the definition of “monopoly” in any way shape or form.

    Perhaps the question of whether they are a “monopsony” (a word I had never heard until this debate became a thing) is still unsettled, though from what I’ve read, they don’t meet that definition, either…

    • +1

    • What’s oddest for me is not AU’s fractured fairy-tale logic nor their presumptive claim to speak for all authors, nor even their insistence on redefining English language terms to meet their narrow Anti-Amazon agenda.

      It’s their straight-faced repetition of provably false statements — that Amazon stopped selling Hachette books, that Amazon retaliates against authors who speak out, that Kindle Unlimited has reduced overall author incomes by paying authors $150M+ a year, etc., etc.

      Either AU folks are incredibly stupid, or — more likely — they believe authors, the DOJ, and the American reading public are.

      I suspect it’s the latter case. 🙂

      • Guess they subscribe to the “say it often enough and it becomes true” school of thought. I’ve had patients who are big readers tell me that Amazon was becoming a monopoly w/r/t books. (Enough that I don’t bother getting into a discussion about it anymore…I’d rather talk about their dental problems at that point… 😉 )

        • Wait — you’re a dentist? Then you can just wait and have your say once you have both your hands in their mouths! 😉

        • Makes sense — it’s a time-tested and effective propaganda strategy. When I come across the occasional “I don’t buy from Amazon” type, I refer them to Author Earnings, shrug, and change the subject.

          Ultimately, AU and their ilk are a doomed sideshow — these propaganda efforts are all stillborn due to utter indifference on the part of the public at large.

          After all, publisher and author economics just aren’t subjects that interest most readers — they’ll keep buying whatever books they want at the prices they want to in the venues they want to, regardless of how much noise these bozos make.

    • A monopsony exists when there is a single buyer. Suppliers have no choice. They either sell to the monopsonist, or they keep their goods.

      Barnes & Noble buys books from publishers. That means Amazon is not the only buyer in the market. Hence, Amazon is not a monopsony.

      For a retailer to be a monopoly, it also must be a monopsony. If a retailer wants to be a monopolist, he must control supply. Amazon doesn’t produce the books it sells. It buys them from authors and publishers. If those authors and publishers can sell to other retailers, then Amazon does not control supply.

      The AU people know this. So does the Authors Guild. Both are using the terms to mislead the public in an effort to advance their self-interest.

  5. The only rational I can see for this charade that touches reality at more than two contiguous points is if Preston, et. al. really believe that Amazon’s hegemony over the book market is irreversible and distorts the well-established commercial and legal frameworks for the industry to such a degree that extraordinary remedies are required.

    Or, more colloquially, it pisses me off that Authors United don’t have the balls (or the intellectual integrity) to say they believe that Amazon has won, becoming a defacto public utility for public expression, and now needs to be regulated as such to assure that the rules by which the utility operates are transparent and well-understood.

    Anything less than that comes off as just privileged whining.

  6. Ive been wondering lately, sorry off topic, what philanthropic organizations AMZ has set up, and Bezos, also. And for whom in need.

    I cant say I’ll ever be accepting of the idea of amz paying authors by the number of pages a reader reads, esp since I stop/start/stop/start read over months in order to absorb content of nonfic especially;nor amz’ decreasing % to authors for audio. I see that there are some few authors, in genres of fiction, who have won the brass ring. Some had huge boost from trad pubs first in distrib, some after they pub’d ebks. I dont measure against those. Just the average. I see other authors able to continue to write because their mates or families or spouses are the breadwinners or have money from elsewhere. I cant measure against that either.

    I think most– of the model set by Dean Wesley Smith and Kris, good people, their immense hard work at their own writing, at encouraging others nearly daily, their teaching, their publishing of their own works and the works of others, their commerial interests. I find we are more like that; diversified writers, teachers, publishers, encouragers, attempting to help/warn/include others. And, it is a huge amount of work. Huge.

    amz is only one of our outlets, but cannot be our only one. Just my .02. We make as much income selling exclusively as we do through amz, and much more, though sporadic, through bor sales.

    Not sure about all the back and forth over amz, other than, I find it hard to buy into amazon as savior, and amazon as de debbil. Fact is, it is a business, and a huge tentacled grasping business that is literally ‘online everything’ for a price [not necessarily the lowest price even w shipping breaks, we often find various items esp tools and other hard goods cheaper elsewhere– recently bought a printer for 200 dollars under amz’s price]

    I keep my eye on amz’s changing terms for authors’ pay/%, rather than taking amz’ ‘side’ against all comers or complaints. I think we are in a new world where an author had better be a business mind or have a mate who is, or a partner who is, otherwise boat dead in the water no matter how beautiful the boat.

    That’s the old model, for the author to agree to be infantilized and ‘let’ the agent, pub take care of everything, and hope for the best. For the indie, although some of the far more well off indies often have agents and also trad deals for print either with amz imprints or with other trad pubs, that is not most of us. I daresay, the faster runners have had enormous headstarts being pub’d trad, and now are indie, or sort of, depending. But the other 99% are us. Not complaining. Just saying the models for indie success are out there, but prob not based on the 1% models. That set of opportunities from long ago, is long gone. Yet, I think, all is yet possible. But, in new ways, some not even yet seen.

  7. When I find things I don’t like, I just don’t pay attention to them. Maybe we’ll be blessed and this’ll be the last AU article we have to see for awhile.

  8. How many books/short stories/novellas could these people produce (and how much would their skills improve) if they spent as much time writing as they do whining?

  9. I skipped the article. I really enjoyed PG’s comments.

  10. But the executives convinced themselves over cocktails that they knew the proper price for online digital goods and Amazon didn’t.

    That’s where it gets hard. What is the standard for the proper price?

    Is it maximizing profit on eBooks?

    Maximizing total corporate profit?

    Maintaining market share?

    Taking as much cash from fiction as possible before exiting fiction?

    Much of this comes down to different groups having different objectives. Different ojectives call for different strategies, and different strategies call for different tactics.

    AU wants to set Amazon’s objectives for Amazon.

    Independent authors want to set publisher’s objectives for publishers.

    Traditional authors want to set independent’s objectives for independents.

    Exactly how does one measure the proper price for eBooks?

    God Bless the free market, for it reveals we all act in our own self-interest.

  11. An author documents being “curated” out of the New York Times bestseller lists…
    http://www.autumnkalquist.com/20k/

    I’m shocked, shocked I say, that the NYT is “vanishing” best selling indie/self pub authors and books!

    Perhaps the New America outfit should reconvene their recent anti-Amazon presentation, with an actual more concerning topic. To re-word their thesis slightly…

    “We’re here today to discuss whether [New York Time’s] manipulation of the interaction between the citizen-as-author and the citizen-as-reader, whether this emergence of a master intermediator in the U.S. book market, is a problem that requires the government to act. And if so, what might the government do?”

  12. The entire AU thing reminds me of that old saying:

    “Eat s**t long enough, and you’ll develop a taste for it.”

    The AU Crowd is eating what Trad Pub throws them with a BSEG… while crowing how delicious it all is.

    Well, good for them. Enjoy! 🙂

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