Elites or freedom fighters: How the Amazon-Hachette battle took on the rhetoric of class warfare

14 July 2014

From GigaOm:

One side defends the ideals that this nation was founded on: Independence and freedom from tyranny. The other side is made up of elites who keep the little people down and take the money that is rightfully theirs in an attempt to control the message and maintain the status quo.

I’m talking not about the Tea Party and big government, but the worlds of self-publishing and traditional publishing. Yet the rhetoric in both debates often sounds very much the same. In 2009, the Tea Party movement took shape in the United States. At just around the same time, ebooks began gaining in popularity, and as the digital publishing revolution took off, so did the once-stigmatized practice of self-publishing. Authors were suddenly able to get their ebooks to large audiences without going through traditional publishers. On January 20, 2010, Amazon began offering 70 percent royalties on self-published Kindle books (priced between $2.99 and $9.99.) In doing so, it opened up a new revenue stream for thousands of people.

. . . .

The wildly differing rhetoric used on each side provides some insight into why the negotiations seem so momentous, and it is one explanation for why it can be so difficult for the supporters of each side to find any common ground. Some of the most outspoken leaders of the self-publishing movement have adopted Tea Party-like rhetoric benefiting Amazon that can make it difficult for those from the “elite” world of traditional publishing to sympathize. Those traditional publishers, bestselling traditionally published authors and literary folk, on the other hand, tend toward anti-Amazon arguments that the self-publishing movement finds preposterous.

. . . .

Amazon’s ability to pull this off reflects an underlying trend in the self-publishing movement: Its reliance on Tea Party-esque, “freedom fighter” rhetoric. Earlier this year, self-publishing site Smashwords published “The Indie Author Manifesto,” modeled after the Declaration of Independence and including the line “I shall not bow beholden or subservient to any publisher.”

. . . .

Meanwhile, statements that Hachette and Amazon released last week illustrate the ways in which Amazon has picked up on the voice of the self-publishing movement, while Hachette’s language is stilted and formal:

Hachette:

“Amazon has just sent us a brief proposal. We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion. We believe that the best outcome for the writers we publish is a contract with Amazon that brings genuine marketing benefits and whose terms allow Hachette to continue to invest in writers, marketing, and innovation. We look forward to resolving this dispute soon and to the benefit of the writers who have trusted their books to us.”

Amazon:

“We call baloney. Hachette is part of a $10 billion global conglomerate. It wouldn’t be ‘suicide.’ They can afford it. What they’re really making clear is that they absolutely want their authors caught in the middle of this negotiation because they believe it increases their leverage. All the while, they are stalling and refusing to negotiate, despite the pain caused to their authors. Our offer is sincere. They should take us up on it.”

“We call baloney” is the master stroke: Brief, folksy and eminently tweetable. “Our offer is sincere. They should take us up on it.” Just 51 characters — easy to share that!

Hachette’s statement is written with more complex language and can’t be distilled into a single phrase; there is nothing there that you want to tweet and I had to think for a second about what they meant by “sanctions.” Both sides argue this is war, but Amazon is more charming about it and makes its message easier to spread.

. . . .

One of the main reasons that charges of “elitism” rankle the traditional publishing world, I think, is that most people who work in the industry — whether they are publishers, independent booksellers, editors or authors — don’t feel like one-percenters. And most of them aren’t: Book publishing pays notoriously low salaries and most authors — whether they are traditionally published or self-published — will never get rich.

Supporters of Hachette and traditional publishing fear Amazon’s growing power. They worry that its business practices will drive publishers into the ground, forcing them to consolidate or go out of business, and leading to a less competitive and vibrant marketplace for books.

But I think that many members of this group fear the loss of the “right” kinds of books. Thus far, all of the greatest self-publishing successes have been in genre fiction – thrillers, mystery, romance, science fiction — rather than literary fiction or narrative nonfiction, the types of books that win the biggest prizes and get serious reviews. There is a fear that in a world dominated by self-publishing and Amazon, it’s not just “books” that wouldn’t get published, it’s the “important” books that wouldn’t get published. (Robert Caro, anyone?)

There is, too, a fear that Amazon does not value or respect books as cultural objects. “To our knowledge, Amazon has never clearly and unequivocally stated (as traditional publishers have) that books are different and special, that they can’t be treated like the other commodities they sell,” the Authors Guild’s Richard Russo wrote last week. “This doesn’t strike us as an oversight.”

Link to the rest at GigaOm and thanks to Sharon for the tip.

PG understands the use of the term, Tea Party, in the article for timeliness, but suggests that Populist is a better description of some of the characteristics of the indie publishing community. Populist movements have arisen on both the right and the left in American politics.

Additionally, the self-publishing viewpoint is international and a uniquely American political term probably doesn’t describe similar feelings overseas.

Amazon-Hachette: The Sounds of Silence

14 July 2014

From regular TPV commenter William Ockham via Joe Konrath:

Everybody’s talking about Amazon’s latest move in the Amazon-Hachette kerfuffle and the reactions have been pretty predictable. Lots of confirmation bias going around. While the public broadsides, grand offers, and nasty anonymous leaks are full of sound and fury, I’m fond of looking for the truth in the silence. What the companies aren’t saying is as important to understanding the situation as what they are saying. I’m not sure if anyone has noticed, but neither side has denied any of the specific factual claims the other has made. In fact, if we read between the lines, we can cut through the noise and see what’s really happening. I have learned* the best way to do that is to make a timeline. Our brains have a tendency to remember the order in which we learned a set of facts and it has a hard to reassembling the chronological order of how things actually happened. We should be continually re-evaluating our understanding of this situation based on new information.

. . . .

What does the timeline tell us?

1. Hachette did not negotiate in good faith before the end of the contract.

They didn’t negotiate at all. Amazon and Hachette agree on this crucial point. The first Hachette offer was in April. Amazon says the original contract ran out in March and Hachette hasn’t denied it. In my view, the party that makes no attempt to negotiate during the term of the original contract is the instigator of the stand-off.

2. Hachette knew for months that their authors were being harmed and they did nothing.

Sullivan noticed that the usual Amazon discounts on his titles were gone on February 7. He saw the inventory issues on March 9. He let Hachette know about both issues. At that point Hachette had let their contract expire without so much as a counter-offer.

. . . .

4. Hachette was able to pull off a complex, multi-million dollar acquisition of a smaller publisher, but unwilling to fund either of Amazon’s offers to help the affected authors.

The publishing half of Perseus was estimated to have revenues in the $100 million range. That’s a pretty big deal in the publishing world.

5. Since the dispute became public, Hachette has essentially abandoned the negotiations in favor of a concerted public relations campaign.

Hachette’s last offer was in May around the time the affair became public. Amazon sent them another offer on June 5. Hachette has orchestrated a high-profile publicity campaign with big name authors, a popular TV host, and the publishing industry press taking up Hachette’s cause. Hachette has even enlisted the New York Times to play stenographer for them.

6. Hachette has a powerful incentive to drag this out.

To achieve its goal, Hachette needs to delay the final agreement until late 2014 or early 2015. That is the earliest time they will be able to conclude an agreement with Amazon that restricts Amazon’s ability to discount ebooks. Moreover, developments in Apple’s ongoing appeal could substantially impact Hachette’s negotiating position. An Apple loss or settlement would make reaching an agency deal (with no discounting) almost impossible because Amazon is not going to agree to let Apple underprice them on ebooks.

Link to the rest at Joe Konrath

Amazon Gave Panelists Talking Points to Answer Questions About Hachette

12 July 2014

From Time:

On Saturday, Amazon Studios, Amazon’s original video content production arm, will present its upcoming slate of original programming to the Television Critics Association. That line-up will include Bosch, an adaptation of Michael Connelly’s best-selling series of books about LAPD detective Harry Bosch, which happen to be published by Little, Brown and Company, which is part of Hachette, the media company involved in an ongoing and public dispute with Amazon. The dispute has most noticeably manifested itself in shipping delays for Hachette titles on Amazon, but it looks like the retailer is prepared for Bosch to be another reason for consumers and critics to be curious.

TIME received a copy of the talking points provided by Amazon to the Bosch panelists, with suggested answers for questions about the show as well as about the Hachette dispute.

. . . .

-  For a question about how the dispute has affected the series, the suggested answer is that there has been “zero disruption in Michael [Connelly’s] involvement in the series or our filming schedule.”

- For a question about personal feelings about the dispute, the suggested answer is “I don’t know the particulars on that situation.”

Link to the rest at Time and thanks to Patricia for the tip.

Will Amazon’s Revenues Rise $11.2 Million If Hachette Caves?

11 July 2014

From Forbes:

Amazon is trying to force Hachette to accept a smaller share of the cash Amazon gets when consumers use it to buy e-books written by Hachette authors. Although the war of words is loud, what investors need to know is how much the outcome of that war is likely to affect Amazon’s financial condition.

My guess is that it will be worth $11.2 million in additional revenue for Amazon — .014% of Amazon’s $78 billion in revenue. In other words, from an investment perspective, this wordy dispute is much ado about nothing — unless winning this dispute forces all the other publishers to cave.

Amazon is trying to change the terms of its e-book contract with Hachette — I am guessing for the purpose of putting more of the reader’s money in its pocket — which means Hachette gets less.

. . . .

This situation would make a great business school case.

. . . .

And to analyze the financial impact the outcome of this dispute is likely to have on Amazon, it is helpful to trot out the idea of expected value — where an analyst envisions different possible outcomes of the dispute, estimates the payoff of each outcome, and guesses at the probability of each scenario actually happening.

The expected value is what you get by multiplying the probability of each scenario by its payoff. Of course applying the expected value concept is made difficult by the fact that nobody can predict the future — casting doubt on the realism of the numbers made up to do the analysis.

My conclusion is that the expected value of Amazon’s e-book battle with Hachette is $11.2 million in additional revenue for Amazon. This is based on a 10% probability that Amazon will get Hachette to give it 50% — worth $32 million plus the 50% probability that Hachette will agree to give Amazon 40% — worth $16 million, plus the 40% chance that Hachette will stand firm — worth nothing more to Amazon.

. . . .

According to Amazon.com’s Brittany Turner, “You have to look at the parent company — Lagardère Group — rather than just the Hachette division. Kindle books are only 1% of Lagardère Group’s sales. They can afford it, and should stop using their authors as human shields.”

Link to the rest at Forbes

Amazon/Hachette

11 July 2014

Smashwords CEO on Why He as an Indie Author Supports Hachette Against Amazon

10 July 2014

From Digital Book World:

Mark Coker, the CEO of self-publishing distribution business Smashwords and an indie author himself, is rooting for Hachette in its current business dispute with Amazon.

Unlike many indie authors, Coker is rooting for Hachette to prevail against Amazon because he believes that a Hachette loss now would make it harder for big publishers to eventually switch to the old “agency” model of selling ebooks (where the publisher sets the price and takes 70% of the proceeds) and that the agency model is good for indie authors.

. . . .

Coker believes that the agency model:

1. Has allowed indie authors to price ebooks lower to consumers, creating a favorable price comparison with traditionally published ebooks, while still earning a large royalty.

. . . .

3. Benefits authors (giving them more sales channels to pursue), publishers (same as authors) and readers (who get more choice when it comes to how and where they purchase ebooks).

Link to the rest at Digital Book World and thanks to Loretta for the tip.

Amazon Dangles E-Book Offer Amid Hachette Dispute

9 July 2014

From The Wall Street Journal:

Amazon.com Inc. appealed directly to authors in a bitter publishing dispute, hoping to gain hearts and minds—and leverage—against Hachette Book Group in talks that could affect e-book pricing industrywide.

The Web retailing giant has proposed letting Hachette authors keep 100% of the revenue from their digital-book sales while the online retailer and publisher continue tense negotiations over a new e-book contract.

Hachette quickly rejected the proposal.

. . . .

Amazon is pushing for a greater share of e-book revenue and lower e-book prices. Its negotiation with Hachette has turned into a messy, public battle over the future of the book industry. As part of its negotiating tactics, Amazon has removed the preorder button on coming Hachette titles, delayed shipments of some Hachette books and reduced the discount offered on some Hachette books.

The retailer’s latest proposal is an effort to win back the support of Hachette authors who say they have unfairly become collateral damage in the negotiation. Amazon indicated in the letter that it hopes the move will speed up the talks.

Hachette on Tuesday afternoon indicated it wouldn’t accept the idea. The publisher said, “Amazon has just sent us a brief proposal. We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion.”

Amazon then shot back. Referring to a statement from the publisher earlier Tuesday that accepting such a proposal would be suicidal, Amazon said: “We call baloney. Hachette is part of a $10 billion global conglomerate. It wouldn’t be ‘suicide.’ They can afford it. What they’re really making clear is that they absolutely want their authors caught in the middle of this negotiation because they believe it increases their leverage. All the while, they are stalling and refusing to negotiate, despite the pain caused to their authors. Our offer is sincere. They should take us up on it.”

. . . .

For Amazon, which sells everything from diapers to DVDs, the hit would be marginal, analysts said. “Hachette constitutes a very small part of Amazon’s business,” said John Tinker, an analyst at Maxim Group. “It’s a smart PR move by Amazon.”

Mike Shatzkin, chief executive of Idea Logical Co., a New York publishing industry consultancy, said, “Hachette has a tough row to hoe here, because their authors are getting hurt and missing the best-seller lists.”

. . . .

In an interview on Tuesday, Mr. Preston said the Amazon proposal would be “devastating” to Hachette while “barely hurting Amazon at all.” Mr. Preston also said he objected to the proposal because Hachette has supported him throughout his career. “There’s something wrong with this,” he said. “My publisher gave me a very large advance for the book they are about to publish. Morally, I would have to turn over that [Amazon] money to them.”

A spokeswoman for Amazon said that Mr. Preston “can opt out of the offer for himself if he wants to, but he shouldn’t stand in the way of debut and midlist authors benefiting from this offer.”

. . . .

The retailer also provided a more detailed account of the talks, saying it contacted Hachette at the start of January to discuss terms for their e-book contract that expired in March. “We heard nothing from them for three full months,” the letter says.

Amazon said it then extended the contract into April. But negotiations didn’t begin until it reduced its inventory of Hachette titles—leading to shipping delays—and reduced the discount it offered to consumers on Hachette books. Amazon said it last made a proposal to Hachette on June 5 but that Hachette hasn’t responded with a counteroffer.

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

Amazon offers authors e-book proceeds amid Hachette dispute

9 July 2014

From The Seattle Times:

Amazon is offering authors caught up in its dispute with Hachette Book Group all of the proceeds from the sale of any digital book, seeking to bypass the publisher and appeal directly to the writers.

Seattle-based Amazon sent a letter to writers, including Douglas Preston, proposing to take them out of the middle of the spat by giving them all of any e-book revenue, Preston said in an interview. Preston, co-author of the Pendergast series of books, led an effort to rally authors and readers to petition Amazon to end the dispute.

. . . .

“Hachette would never accept something like this,” Preston said of Amazon’s proposal, saying it would violate writers’ contracts. “It seems to me like an attempt to divide authors from publishers. It seems like a negotiating ploy rather than a serious attempt to bring the two sides together.”

. . . .

Amazon, meantime, said Hachette is putting authors in the middle of the dispute to try to increase its leverage.

“Our offer is sincere,” Sarah Gelman, a spokeswoman for Amazon, said in a statement. “They are stalling and refusing to negotiate, despite the pain caused to their authors.”

Link to the rest at The Seattle Times and thanks to Lisa for the tip.

Backing the Wrong Horse: Why choosing sides in the Amazon-Hachette feud is a moron’s choice for writers

8 July 2014

From author Michael Stackpole:

Let me state at the outset that the following is likely to outrage writers and publishers. Those who deign to comment will dismiss me as being ignorant or mistaken or secretly in agreement with the “other side.” I want to be clear: the “side” I’m taking in this discussion is mine and mine alone. I’m in business. The only person who will look out for my interests is me. The same is true for any business—Amazon, Hachette, Apple, the rest of the Big Five included.

. . . .

1) A writer is the least important part of the book selling eco-system.

Sure, read that again. You’re thinking, “But without writers, how do they get the stuff they sell?” The problem with your question is that you miss the answer—which you’ve buried in your question. Publishers don’t need writers, they need product. If they needed real writers, James Patterson, Snooki and any other ghosted celebrity author would never have a book appear on a shelf.

Any one writer, myself included, is expendable. And as the explosion of RAW work proves, for every one writer working today, there are five thousand or so souls eager to take our places. Heck, in teaching classes at conventions like DragonCon, I’ve trained thousands to take my place. Any one writer has plenty of competition, and the law of averages suggests that at least one of them is going to be just as talented as the writer they replace.

Moreover, and here’s the really scary part, the desire for validation—the desire to have an authority figure choose your writing as worthy of publication and promotion—is so fierce, that many authors will accept incredibly crappy deals, just so they can be “living the dream.” This means that publishers have zero incentive or need to be making better deals with beginning authors.

. . . .

4) But digital will save us all.

While folks on both side of the Amazon-Hachette fight champion their patrons as being the altruistic folks who look out for writers, it strikes me that they’re forgetting some very recent history at their peril.

As concerns Amazon, folks have forgotten that back before Apple and the iBookstore entered the market, Amazon paid authors 35% of the cover price of any digital book. Amazon’s backers will point out that that price is still better than the 25% that legacy publishers offer today. Amazon, in its wisdom, had decided then that 35% was the best place for it, and only came up to 70% when forced to by the competition. If 35% was in their best interest then, it’s hard to see how the corporation would view taking less as in its best interest now. There has to be some internal pressure to start moving that price down—which is something they’ve done with books they actually publish with their own imprints.

. . . .

[L]egacy publishers engaged in several, very well publicized fights with authors over the publishers’ contentions that even though their contracts had never mentioned ebooks, that the contracts covered ebooks, and that the publishers would bring out ebooks and just start shipping the 25% to the authors, thank you very much.

To sum this all up: all corporations will act in their own self-interest. Publishing and book retailing companies have self-interests which do not align with those of writers or, in particular, readers.

Link to the rest at Stormwolf.com and thanks to R.L. for the tip.

Amazon-Hachette fight deepens as authors take sides

5 July 2014

From The Guardian:

In one corner stands the old guard: established, prize-winning, bestselling writers such as Stephen King and Donna Tartt. On the other, the new: the hottest names in self-publishing, from Hugh Howey to Barry Eisler. As the battle between Amazon and Hachette widens, hundreds of authors are stepping into the ring, putting their names to rival petitions in support of the duelling combatants.

. . . .

When the bestselling writer Douglas Preston began circulating an open letter criticising Amazon’s actions, he quickly garnered support from more than 100 names, including Tartt, King, Paul Auster, James Patterson, Clive Cussler, John Grisham, Anita Shreve and Philip Pullman.

Speaking to the Guardian, Pullman explained he had added his name because he was against “any one party in a complex web of mutual benefit and dependency, such as a market, acquiring a disproportionate amount of power”.

“It’s clear that some parties (in this case, those who buy books) have benefited from the lower prices that Amazon makes available,” he said. ‘It’s also clear that other parties (such as authors and independent booksellers) are suffering. In the long run, this won’t be sustainable; a whole ecology, as I’ve called it, might die because of the forced starvation of part of it.”

According to Pullman this is simply the normal functioning of a market “operating as markets do without regulation”.

. . . .

“Someone at Amazon (and this means Jeff Bezos, no doubt) needs to step back a little from the relentless hunt for profit at whatever cost to think about the social and cultural environment in which Amazon operates. Let’s hope he listens.”

But self-published authors responded to Preston’s open letter on Thursday with their own petition, which now boasts over 3,000 signatures.

Launched by Howey – author of the hit dystopian novel Wool – and others including the bestselling thriller writers JA Konrath and Barry Eisler – the letter urges readers not to boycott Amazon, arguing that the online giant has liberated authors and readers alike from the clutches of “New York Publishing”.

“Major publishers like Hachette have a long history of treating authors and readers poorly,” the petition states. “Amazon, on the other hand, has built its reputation on valuing authors and readers dearly. The two companies didn’t simultaneously change directions overnight.”

. . . .

Preston said the authors who have signed “probably represent over a billion books sold”, and that he had “never seen so many writers get so involved. And the emails are hitting my inbox faster than I can open them.”

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

Next Page »