Amazon

Wylie the jackal becomes Hachette’s running dog?

31 October 2014

From TeleRead:

Never one to bear a grudge or indulge in overly aggressive, unreflective self-promotion, Andrew Wylie can’t seem to forgive Amazon for the failure of his Odyssey JV with them – or in general, for failing to acknowledge that nothing moves until Andrew Wylie says so. And now he’s blaming Amazon for depriving writers of a decent living. “Writers will begin to make enough money to live,” he claims, according to his keynote address at Toronto’s International Festival of Authors, if only the Big Five have the cojones like Hachette to stand up to Amazon, who he doesn’t hesitate to compare to ISIS.

. . . .

And remember that back in 2010, Wylie was garnering support from authors for his Amazon tie-up because they claimed traditional publishers had been paying too little in royalty rates for ebooks. And now things have turned round and the Big Five are the heroes again? Forgetful creatures, jackals.

It’s no surprise that Wylie also chose to unload on self-publishing, which he described as “the aesthetic equivalent of telling everyone who sings in the shower they deserve to be in La Scala.” After all, if authors can publish themselves, who will ever want to go through Andrew Wylie. Or even listen to him?

Link to the rest at TeleRead

Why we need an e-book DRM DMCA exemption

31 October 2014

From Chris Meadows at TeleRead:

It’s that time again. Ars Technica reports that the Copyright Office is accepting petitions on activities to exempt from the DMCA’s anti-circumvention provisions, making it legal to crack DRM for certain restricted purposes.

. . . .

Public Knowledge will be submitting requests to legalize consumer ripping of DVDs and to allow circumvention of DRM locks on 3D printers. I’m not holding my breath.

. . . .

Here’s a crazy thought: if the Big Five publishers knew what they were doing, they would be submitting and throwing their weight behind a petition to permit consumers to crack e-book DRM for purposes of archival and platform interoperability. Think about it. Publishers already full well know their insistence on DRM effectively handed Amazon the keys to the kingdom, and their conflict with Amazon has come to a head over the last few months with the Amazon/Hachette squabble. What better time to ask the government to permit consumers to break the Amazon shackles?

This would be a way for publishers to have their cake and eat it, too. They could continue to put DRM on their books, placating authors who fear piracy, and it would continue to be illegal to crack DRM for pirate purposes. And what would it really change? It would only legalize something a lot of consumers already do illegally. It’s not as if they’re even trying to hunt down and prosecute people who crack DRM illegally anyway, unless they do something stupid like upload watermarked books to peer-to-peer.

. . . .

With legalized DRM-cracking for interoperability, e-book stores could set up their own DRM-cracking import services for the people who aren’t tech-savvy enough to set up Calibre themselves. Want to move all your e-books from your Amazon library to Barnes & Noble, or Kobo? Just drag and drop the files from your “My Kindle E-Books” directory onto this uploading app and we’ll take care of everything for you! Who knows, it might even make it possible for other e-book stores to compete with Amazon if you could make it almost as easy for customers to switch away from them and keep their libraries as it is to keep using them.

Link to the rest at TeleRead

Rupert Murdoch urges media firms to unite to fight Amazon and Netflix

30 October 2014

From The Guardian:

The media industry needs its own competitor to online streaming giants Amazon and Netflix, Rupert Murdoch told a technology conference on Wednesday.

“As an industry, we need a competitor – a serious competitor – to Netflix and Amazon,” Murdoch told the Wall Street Journal’s WSJ.D conference in Laguna Beach, California.

Link to the rest at The Guardian

Political Partisans Agree on One Thing: They Like Amazon

30 October 2014

From Advertising Age:

Democrats and Republicans might not agree on much, especially in a particularly bitter midterm election cycle. But a 2014 YouGov BrandIndex ranking of favorite brands finds some agreement among political partisans. Amazon, for one, comes in No. 1 among Democrats and Independents and No. 2 among Republicans.

Craftsman, Johnson & Johnson, Clorox and Dawn were the four other brands that landed in the Top 10 lists of people of all political stripes. Samsung made its debut; Home Depot fell off.

. . . .

Not surprisingly, Fox News (with a -28) came in last with Democrats and MSNBC (-31) last with Republicans. Perhaps a little surprising: Red Bull and 5-Hour Energy tied for last spot with Independents with a -17.

. . . .

There were a handful of brands that occurred on only one list. Dove, PBS and Barnes & Noble showed up only on the Democratic list. Quaker showed up only on the Independent one. And History Channel, Fox News and M&Ms showed up only on the Republican list.

Link to the rest at Advertising Age and thanks to Dominick for the tip.

For visitors to The Passive Voice from overseas, elections will occur in the United States next Tuesday.

Ebook Tax Rises to Hit Publishers, Retailers, and Writers

28 October 2014

From Chris Lynch: Hack of All Trades:

Following a European Commission ruling dating back to 2008, e-books are to be taxed in the European member state in which the consumer is located, at the tax rate of that country, as opposed to the country from which the product is sold. The move prevents Amazon, Nook and Kobo from applying the low 3% tax on e-books sold to European countries, just because their headquarters are in Luxembourg. Instead, the e-book retailers will have to apply the standard UK VAT rate (20% at the time of writing) to e-books sold into the UK.

. . . .

Some publishers are already threatening a “revolt” if Amazon tries to pass the additional costs on to publishers. Speaking to The Bookseller Alessandro Gallenzi, founder of Alma Books, said: This isnt a thorny issue, its a hornets nest. Who will take the hit? I dont know. Amazon has so far been absorbing it; I doubt itll do the same moving forward. However, if it tried to force it on publishers there will be revolt and Amazon knows that.

. . . .

From a practical standpoint, there isn’t any good news for writers here. If you’re working with a traditional publisher who ends up with higher costs, or deeper discounts, as a result of this change then you will see your royalties squeezed. If you’re an independent, expect to have to work even harder to market your book as prices creep upwards.

If Amazon are smart about this they’ll protect their KDP exclusive writers for as long as possible from this VAT change, making their platform more profitable for their indie authors and slipping another knife into the ribs of traditional publishing houses.

. . . .

The downside is that UK consumers, publishers, and creators have been working, some even thriving, under a system where the largest retailers were operating in a tax structure that was, at best, a loophole. Like it or not, its hard to paint this as a tax rise; it’s the closure of a loophole. Readers may love their cheap eBooks, but the gravy train may be coming to an end.

. . . .

Despite the ruling, booksellers across the spectrum have long argued that digital books should attract the same 0% VAT rate as physical books in the UK. An Amazon spokesperson said: Amazons view is that the same reduced VAT rate should be applied for both p-books and e-books.

Link to the rest at Chris Lynch: Hack of All Trades and thanks to Nirmala for the tip.

Save the Book Publisher

28 October 2014

From Bloomberg View:

Last week, Matt Yglesias wrote a piece with the headline, “Amazon is doing the world a favor by crushing book publishers.” He thinks that “publishers are superfluous,” they’re “terrible at marketing,” and also something about advances.

Let’s think about what publishers are, what they have to offer authors who would otherwise self-publish and what alternatives to them exist.

Let’s think about what publishers are, what they have to offer authors who would otherwise self-publish and what alternatives to them exist.

A lot of work goes into publishing a book. Someone needs to edit the manuscript. The manuscript must be typeset and copy-edited. A cover has to be designed (most self-published books are terrible in this regard). The book needs to be marketed to readers, which can require producing ads and seeking out publicity. Paper books have to be printed, stored, shipped to distributors and bookstores, and sold; returns need to be managed. E-books have to be converted to various formats, ideally not just using automated tools.

Self-published authors can try to do all of these jobs themselves. Many attempt that, and it shows. Or they can outsource some or all of the tasks. When doing so, it’s best to use professionals who have tried to publish a book before. Maybe a team that’s used to working together. Perhaps the people even sit in the same building, so that they can quickly coordinate.

Congratulations: You have just re-created publishers, but without advances.

The question is how to pay for all of that. Since there is no advance, the author has to not only finance writing the manuscript — which can be a big burden — but also to come up with perhaps tens of thousands of dollars to prepare the book for publication.

. . . .

It’s probably true that publishers are terrible at marketing most books. And it may be true that some books aren’t edited very well, although I know that my book editor girlfriend spends a lot of time on her manuscripts. The mistakes of big publishing are legion, but I doubt that the problem is that publishers are not investing enough in their business; rather, they are not investing enough in the right areas.

Link to the rest at Bloomberg View

PG is obviously biased, but, as a journalistic genre, these apologias written to inform the peasants how important publishers are seem more and more lame.

Amazon’s Dispute With Hachette Might Finally Be Hurting Its Sales

27 October 2014

From Time:

The book business launched Amazon to success, and now it’s hurting the online retailer’s growth.

Amazon announced its worst quarterly loss in 14 years Thursday, losing $437 million in three months. One of its worst-performing segments? Amazon’s old core business: North American book, movie and music sales. The segment’s sales increased a mere 4.8% from 2013, the slowest growth for the category in more than five years. That compares with a 17.8% growth in that segment a year ago.

Amazon chalked up the slow media segment growth to fewer students buying textbooks, but that doesn’t seem to be the whole story. In fact, the company’s woes may in part be related to its damaging publicity spat with the publisher Hachette.

. . . .

There isn’t much visibility into what’s going behind closed doors and in sealed accounting documents at Amazon, but by targeting Hachette, Amazon is making it harder to buy the retailer’s own books. A customer deterred by an artificially long shipping time on a Hachette book is a sale lost. For a huge company like Amazon, that may be little more than a self-inflicted scratch, but it’s likely making difference.

And more importantly for the online retailer over the long term, the dispute may be hurting Amazon’s image and turning customers away. For book readers who love particular authors, it’s hard to forget when a bookstore is accused of having “directly targeted” a favorite writer. A literary-inclined crowd, already more likely to side with the letters people than the money people, may see the Hachette dispute as a turning point. “It’s logical that readers identify more with authors than with Amazon,” says Colin Gillis of BGC Financial. “Amazon is a service. You may like the service but you build a relationship with authors.”

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

Do Publishers Deserve to Exist?

27 October 2014

From Dr. Syntax:

This week’s screed against book publishers comes from Matt Yglesias at Vox.com, who proclaims, “Amazon is doing the world a favor by crushing book publishers”–a headline that shouts clickbait but fairly reflects his piece. Yglesias, whose work I have often admired, notes that he’s the child of two authors and has published a book himself, so his hatred seems to be honestly earned. Writing of the “fundamental uselessness” of publishers, he says they are going to be “wiped off the face of the earth soon” by Amazon “and readers will be better for it.”

Book-business types rolled their eyes at Yglesias’ hostile tone and ignorance of some key facts, but I saw it cited as smart and “thoughtful” by a number of media people and others who I’d have hoped would know better.

. . . .

Curation. The function of choosing what work is most worth presenting to readers is derided by some as a retrograde, “elitist” notion. Why should publishers appoint themselves as selectors of what people ought to read, when everybody can  put their work online and let readers judge for themselves?

For starters, think about the staggering number of books released every year: in 2013 it was close to one million–304,000 traditionally published and more than double that number of self-published books (precise figures are hard to collect because many self-pub titles, including those produced on Amazon, aren’t captured by standard industry measures). A customer going into a bookstore confronts what may seem like a dizzying number of titles. But all of them have been through a multi-step screening process where agents, editors, marketers, and booksellers have determined these books have value.

When I was a publisher, I probably turned down a hundred books for every one I published–and most of those had already been screened by agents who filtered another hundred for each one they sent me. Imagine the bookstore–more like a mega-warehouse–where all of those titles are on the shelf.

. . . .

 Investment/Venture Capital. Publishers pay advances against royalties, taking substantial risk that enables authors to undertake time- or money-intensive reporting, or sometimes just to feed their families, while they’re working on their books. Even novels sometimes require travel and research. This point has been made by several other writers (such as Franklin Foer and Evan Hughes) so I won’t go into depth on it here. Suffice it to say that unless someone is willing to risk substantial advances, the only authors who’ll be able to devote months or years to their work will be those who are independently wealthy.

. . . .

When authors who have not already captured the public’s attention publish themselves, by and large the results do not prove the uselessness of publishers. The average sale of a self-published title is under 250 copies, somewhat less than the average number of friends on Facebook. (I say this not to bash self-publishing, which is a fantastic opportunity for some authors and demonstrably a route to stunning success and riches for a few. But just because some authors achieve stunning success without publishers does not mean the latter add no value.)

The tragedy of publishing is that publishers are never as good as marketing as they would like to be. Any thoughtful bookperson is all too aware of this, even before disappointed authors like Yglesias remind us. Blockbusters aside, the revenues generated by any individual book are barely enough to cover much more than the cost of mailing review copies, maybe a couple of online ads or a handful of author appearances. That every new book is a unique product, whose audience won’t be quite the same as any other book, means that each marketing campaign is a matter of inventing the wheel–horribly inefficient. And for these reasons, the time and attention of publishing personnel are also limited resources that are typically stretched too thin.

. . . .

Marketing a book is a far larger and more complex process than just listing it on Amazon or buying a New York Times ad. In a publishing house, the marketing process begins even before a title is acquired, with an editor kindling enthusiasm among colleagues. As the process gathers steam, word is spread out to the world by publicists, sales reps, e-mails and personal letters, schmoozing, and gossip, plus advertising, review copies and free advance e-books, social media, and paid promotions with bookstores and online sellers.

As soon as a manuscript enters the publishing pipeline, the house is communicating with retailers, reviewers, media producers, movie scouts, foreign publishers, and all the other channels by which readers hear about books, telling them what makes this title worth reading. One of the oldest publishing truisms is that word of mouth is the most effective way to sell books, and in some ways a publisher is a large group of people organized to generate word of mouth and amplify it as widely as possible.

. . . .

If lower prices are good for readers, so is diversity in the marketplace of ideas. If Amazon were to “crush” publishers, first of all, book sales would plunge as printed books, and thousands of sales outlets for them, largely disappeared. The publisher-less world Yglesias imagines will also be a bookstore-free world, totally dominated by one seller that will have even greater sway over what gets promoted than it does now. It will also have the ability to change at whim the terms it offers to authors, in their disfavor, as it already has more than once. That’s my idea of a dystopia, not of readers being better off.

It is naive to imagine that trading many different publisher-gatekeepers for one or a few massive retailer-gatekeepers would result in authors “seeing their total income rise.” As for readers, the serendipity of browsing bookstore shelves and of discovering a book you didn’t know you were looking for, or of getting a great recommendation from a clerk who knows your taste, will be nostalgic memories– replaced by a search function and algorithms completely controlled by one or two companies who make the “giant conglomerates” that own publishers look puny and who may tilt the playing field for their own purposes.

Link to the rest at Dr. Syntax and thanks to Barry for the tip.

Read this before you take sides in the tussle between publishing houses and Amazon, Flipkart

25 October 2014

From Tech in Asia:

The tussle between big book publishers and Amazon, which started in the US, has now spilt over to India, where local ecommerce leader Flipkart has also been dragged in.

The arguments made against Amazon and Flipkart have a familiar ring – that their discounts will kill the publishing industry in the long run, that the two companies are becoming a duopoly, and that ebooks need to be priced higher for the sake of authors.

The publishing houses enjoy sympathetic coverage in the mainstream media in both the US and India, as the godzilla Amazon makes an easy target for scare-mongering. This report in The Economic Times, for instance, presents a one-sided view of the issue. It doesn’t alert readers that the claims made by publishing houses are exaggerated on several counts, not the least of which is that digital publishing and online distribution are hurting authors.

Ashok Banker, well-known Indian author of the Ramayana Series, is unequivocal when he explains how much he has gained from ebooks. He tells Tech in Asia:

The ebook editions of my books now outsell the print editions by a factor of easily 100:1. As in, for every 100 ebooks sold of a particular title, the publishers sell barely one print copy. To look at it another way, the print editions have increased in sales at a rate of about 10 percent each year, while ebook sales have doubled every six months or so for the past three years.

. . . .

By and large, however, the well-established authors, who manage to wangle decent royalty deals for printed books, pitch in for the brick-and-mortar publishing industry. And they are the ones usually quoted in the print media. Amish Tripathi, author of the much-loved Shiva Trilogy, had this sweeping statement in The Economic Times: “Online stores are not convenient for browsing as against a physical bookstore where people spend hours discovering new titles. This creates a problem for new authors who find it difficult to be visible on these sites.”

. . . .

Initially, when he submitted the manuscript of his first book to the publishers, all of them, without exception, rejected the book. Then Tripathi decided to self-publish. His agent invested in printing, and he in its marketing. The management techniques Tripathi learnt at IIM (Indian Institute of Management) probably helped him spread the word about the book on social media. “When my book became a best-seller within a week, and sold 45,000 copies in less than four months, the publishers came back to me,” he told me in an interview earlier this year.

. . . .

Ashok Banker too, despite a successful start to his writing career, got stymied by the “MNC factory publishers,” as he describes the major publishing houses. There were no takers for his Ramayana Series in India, which then got snapped up abroad. He explains what prompted him to eventually take the self-publishing route:

Once the Ramayana Series was bought by all those foreign publishers, the Indian publishers immediately became interested in my mythological retellings and bought Indian rights – but still did not expect mythology to sell as well in India as it might sell abroad. So despite the success of the series, when I tried to sell my next titles, they continued to reject them or offer abysmal advances. This was what prompted me to retain ebook rights of all my works and sell them independently on my own website and also on the Amazon Kindle platform.

Banker had the last laugh because mythology went on to become the biggest-selling category in Indian publishing. “Now my publishers want the ebook rights, but I’m not selling them at any price,” he says happily.

Link to the rest at Tech in Asia and thanks to T.M. for the tip.

Paul Krugman Is Wrong About Amazon.com

25 October 2014

From The Motley Fool:

The no-holds-barred fight between Amazon.com  and Hachette Book Group over e-book pricing took a turn for the worse recently (for Amazon, that is) after a number of prominent commentators suggested the U.S. Justice Department should sanction the e-commerce giant for alleged violations of antitrust laws.

. . . .

But to anyone familiar with antitrust legislation — more specifically, federal appeals courts’ interpretation of the Sherman Antitrust Act — it’s clear that claims like these are nothing more than hyperbole. While Amazon is certainly a large and growing online retailer, even a liberal interpretation of its share of the domestic e-commerce market puts the figure at less than 50%, which is well below the 70% threshold courts typically require as proof of monopoly power.

. . . .

The gap between hyperbole and reality widens when you consider the e-commerce market’s insignificance in the context of overall retail sales. In 2013, for instance, domestic e-commerce sales added up to $263 billion, which is a fraction of the $4.5 trillion in total retail sales processed in the United States over the same period.

And even if a court found Amazon to possess monopoly power — as one could somewhat realistically claim it does in the e-book market — that’s still only half the battle, as it must also be proved that said power is being exercised to the detriment of consumers. According to the Justice Department’s antitrust guidance, “Prohibiting the mere possession of monopoly power is inconsistent with harnessing the competitive process to achieve economic growth.”

To prove Amazon is illegally exercising this hypothetical power, in turn, one would have to demonstrate that it is raising prices or curtailing supply by, among other measures, keeping competitors out of the market through predatory pricing or other prohibited means. Implicit in this is the assumption that Amazon earns monopoly profits — that is, the economic profits that accompany inflated prices. But as many investors know, Amazon has never reported meaningful earnings. In 2013, it generated a mere $274 million in net income from $74.5 billion in sales. That equates to a profit margin of only 0.37%.

Link to the rest at The Motley Fool and thanks to Dusty for the tip.

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