Big Publishing

Amazon Responds to German Authors’ Protest

19 August 2014

From Publishers Weekly:

Over the weekend, the New York Times reported on a letter of protest, from authors in Germany, about a terms dispute between Amazon and the local publisher, Bonnier. The dispute, the Times noted, mirrors the issue Amazon is having with Hachette in the States and, just as U.S. authors have spoken out about the situation here, German authors have now responded with their own open letter to the tech giant.

. . . .

[A]n Amazon spokesperson said the company issued a response late Friday. Amazon’s response reads:

“For the majority of their titles, Bonnier have chosen to set terms that make it significantly more expensive for us to buy a digital edition than it is to buy the print edition of the same title. This is a poor choice because with an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, and no transportation. E-books can and should be less expensive than print books, and this should be reflected in the terms under which booksellers buy their books from publishers. The fact is Bonnier’s terms are out of step with other major German publishers. We are working diligently with Bonnier to reach a new agreement more in line with typical industry terms in Germany.”

Link to the rest at Publishers Weekly

PG wonders if the 1% authors have stopped caring about their readers. Or perhaps, they’ve reached the point where they take readers for granted.

Low-priced ebooks allow more books to reach far more readers than any conceivable print-based system. For all their virtues, physical libraries don’t have nearly the reach that the Internet and smart phones have.

Publishers and 1% authors are delusional if they don’t believe that books compete with other entertainment options like movies and television and videogames.

Books priced high to support the profit margins of huge media conglomerates and their 1% managers will invariably lead to less reading and fewer readers. Mercedes prices for ebooks will certainly destroy literary culture.

Indie authors seem to be the only authors who are really thinking about their readers and their ebook pricing reflects that.

Amazon focuses on readers and other individual consumers because it’s not Tiffany. It rises or falls on purchase decisions made by the 99%.

Amazon would go broke if it made its business decisions to please 1% purchasers. Or 1% publishers. Or 1% authors.

In ebook battle, Amazon is right about Orwell – and a few other things

19 August 2014

From Yahoo Finance:

As the big book publishers, led by Hachette, battle with Amazon (AMZN) over ebook pricing and related issues, the publishing industry and media are twisting a legendary author’s words to make an erroneous point.

In March 1936, George Orwell decided to review 10 books offered via a new-fangled, low-priced process – the Penguin paperback. The books were just fine and a good value to the reader, Orwell conceded, but the pricing was an unmitigated disaster for the publishing industry. And he went on to explain, at length:

“It is, of course, a great mistake to imagine that cheap books are good for the book trade. Actually, it is just the other way about. If you have, for instance, five shillings to spend and the normal price of a book is half-a-crown, you are quite likely to spend your whole five shillings on two books. But if books are six-pence each, you are not going to buy ten of them, because you don’t want as many as ten; your saturation-point will have been reached long before that. Probably you will buy three sixpenny books and spend the rest of your five shillings on seats at the ‘movies.’ Hence, the cheaper books become, the less money is spent on books. This is an advantage from the reader’s point of view and doesn’t hurt the trade as a whole, but for the publisher, the compositor, the author and the bookseller it is a disaster.”

Orwell was both dead set against paperbacks and dead wrong about the impact. Paperbacks expanded the overall market for books by attracting many buyers who didn’t purchase high-priced hardcovers. Surely they cannibalized some spending on higher-priced volumes, but the net effect was positive. Orwell’s in good company — the copyright media almost consistently oppose new technologies and formats instead of seeing an opportunity to adapt and profit.

. . . .

But here’s where the craziness began. A New York Times reporter added in the first half of the Orwell sentence quoted by Amazon: “The Penguin Books are splendid value for sixpence, so splendid that if the other publishers…” and claimed Amazon had mistaken Orwell’s intent. “When Orwell wrote that line, he was celebrating paperbacks published by Penguin, not urging suppression or collusion,” reporter David Streitfield claimed.

But check the 154-word passage I’ve cited above – which followed the disputed sentence – and try to determine whether Orwell was favoring those cheap paperbacks. Not at all. He went on in the essay to predict the downfall of libraries and fewer novelists penning books. But now, the mistaken meme that Orwell really loved cheap paperbacks has spread far and wide.

Adding to the irony, the very same New York Times reporter cited Orwell’s words last year – to make Amazon’s point: “No less an authority than George Orwell thought paperbacks were of so much better value than hardbacks that they spelled the ruination of publishing and bookselling. ‘The cheaper books become,’ he wrote, ‘the less money is spent on books.’ Orwell was wrong, but the same arguments are being made against Amazon and e-books today.”

Link to the rest at Yahoo Finance and thanks to Hugh for the tip.

One of the key symptoms of ADS is when otherwise intelligent people say idiotic things to further the narrative of corporate publishing.

“Stupid is as stupid does.”

Forrest Gump

The Guardian view on Amazon v Hachette: reading and writing

19 August 2014

From The Guardian:

It is either an existential threat to intellectual freedom or a rustbelt media industry meeting its comeuppance at the hands of disruptive technology. The battle between the multibillion-dollar publisher Hachette (and now the Scandinavian publisher Bonnier) and the even more multibillion-dollar Amazon is usually discussed in high-minded tones, particularly by publishers and their authors. But at heart, it is merely another collision between producers and consumers that has a particular significance only if you ascribe a value to books as cultural artefacts. It is perfectly possible, instead of Hachette and Amazon, and the 900 writers who took out a two-page ad in the New York Times to protest, to substitute supermarkets, dairy farmers and the price of milk.

. . . .

There are many ways of arguing the rival cases, but the important question is whether a one-size-fits-all, low-price, consumer-dominated sales model can support a diverse, innovative, challenging literary output. Publishers, and their authors, feel that without the front-loaded system of royalties and editorial and marketing support that publishers provide, many important books would never reach an audience. Amazon and its supporters argue that the digital world slashes the back-office costs of publishing, opens up a world of self-publishing, demolishes the gatekeepers of taste, and democratises the literary world.

Neither side is entirely right, nor entirely wrong. Publishing is not perfect. It has a heavily concentrated ownership and a tendency to publish only what has already proved successful (and plenty of booksellers demand a payment for a place on the table by the door too). But Amazon’s business model, which ranks books neither higher nor lower than ladies’ shavers and pet supplies, claims low prices invariably benefit consumers.

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

PG suggests that books are too important to entrust to huge corporate publishers. Only authors care enough about books not to sell out their art to the almighty dollar (or pound, euro, etc.).

Ultimately with publishers it’s all about the Benjamins.

Bridges to span Amazon’s dominance

18 August 2014

From The Financial Times:

What happens if your biggest customer is also your worst nightmare? That is the dilemma facing book publishers dealing with Amazon. Jeff Bezos’s company accounts for about a third of US book sales, publishers estimate, and the ecommerce titan has brought books into the digital age without significant piracy problems.

But Amazon is now exacting a huge price. Its success is bankrupting some of the publishers’ other customers, bookshops, it is deterring online entrants by keeping its margins low or negative, and it is pushing publishers to cut ebook prices. “Publishers are not terribly profitable,” James Patterson, the bestselling Hachette writer, said recently. “If those profits are further diminished, publishers will produce less serious literature.”

Publishers’ main fightback so far – a new ebook pricing model with Apple – was ruled by the US and European Commission to violate antitrust laws by extracting more money from consumers.

. . . .

Mr Bezos always wanted his creation to be the world’s largest bookstore. That ambition has helped make Amazon great; it has also left it vulnerable. If individual publishers withhold books from Amazon, one of the site’s unique selling points will be undermined. “Everyone expects Amazon to be comprehensive,” says Ben Edelman, an associate professor at Harvard Business School, who has highlighted this vulnerability in Harvard Business Review.

Publishers would no doubt be wary of cutting off so much of their sales. And in the past Amazon has managed to source products from third parties. But publishers may struggle in negotiations with Amazon unless they can risk saying no.

. . . .

Scale would not just help publishers negotiate with Amazon. It would also allow bigger investments in new online platforms, brands and multimedia spin-offs, such as games.

On the downside, bigger companies can be less sensitive to developing authors, says Angus Phillips, an academic at Oxford Brookes University.

. . . .

“In the online context, one can absolutely imagine one day publishers will provide books directly to consumers,” says Prof Edelman. Doing so could undermine Amazon’s market share and its buying power.

Some publishers agree. “We have to have a relationship with the consumer,” says Stephen Page, chief executive of British publisher Faber & Faber. “At London Book Fair this year, all the talk was about data.”

Understanding consumers’ habits could help publishers better decide what titles to acquire and how to market them. But there are obstacles. Even selling direct, publishers are unlikely to match Amazon’s prices. Individual houses also lack Amazon’s brand and range. “It’s very, very hard to create a destination site because we don’t represent the entirety of the market,” says Chantal Restivo-Alessi, chief digital officer at HarperCollins, which started selling books direct to US consumers last month.

Link to the rest at The Financial Times and thanks to Tina for the tip.


Two Wrongs Don’t Make a Right

18 August 2014

From Hugh Howey:

But three lefts do.

And what of Orwellian triple-speak? That’s like double-speak, except you circle back around to the truth again. I’m seeing some bizarre protestations about an Orwell quote making the rounds among the anti-Amazon crowd. When Amazon sent a letter to KDP authors asking them to help talk sense into Hachette, one of the points detractors seized upon was a quote from George Orwell about paperbacks. From the letter:

The famous author George Orwell came out publicly and said about the new paperback format, if “publishers had any sense, they would combine against them and suppress them.”

The quote was taken out of context, pundits and bloggers cried. The rest of the letter from Amazon was dismissed because of a single fact that seems to have been gotten backwards. In reality, they said, Orwell thought cheap paperbacks were great. He flat out says so. Can’t you hear the sarcasm dripping from his voice? He wasn’t really suggesting collusion.

Except he was. And he wasn’t being sarcastic at all. An intrepid researcher tracked down the origin of the quote, and Orwell was indeed suggesting, just as Amazon portrays, that he and others of his time thought cheap books would destroy the trade. Great for consumers, sure, but bad for everyone else.

. . . .

Publishers today—like Orwell was in his time—are terrified of affordable literature. Amazon’s point is that they were wrong, and that cheap paperbacks helped grow the entire pie of reading and enrich everyone in the industry. It bears mentioning, I think, that one of the pundits who twisted Orwell’s wording to suit his needs also freely admits that he encourages publishers to jack ebook prices up as high as possible to protect the print trade.

Another thing lost from this debate is that $9.99 is not the ideal price point for all ebooks. In fact, most ebooks would generate more revenue at even lower prices. $9.99 is like a speed limit. Exceed it in rare emergencies, but also feel free to drive slower where appropriate. Among the 120,000 ebooks we’ve analyzed at, $4.99 ends up being the bestselling price point by far.

Link to the rest at Hugh Howey and thanks to Ashe for the tip.

German Writers Join Amazon Ebook Protest

18 August 2014

From Sky News:

More than 1,000 German-language authors have signed a petition against the tactics used by Amazon in its ebook price battle with Scandinavian publishing house Bonnier.

“In the past few months, Bonnier authors are being boycotted and their books no longer held in stock,” the letter, which included Austrian Nobel literature prize laureate Elfriede Jelinek, said.

“The delivery of the books is being subjected to a go-slow, false information is given about their availability, and the authors’ names no longer appear on Amazon’s recommended lists.

“Amazon has no right to take hostage authors who are not directly involved in the conflict.”

Link to the rest at Sky News and thanks to Jan for the tip.

Amazon’s Russell Grandinetti: Kindle champ takes on the books trade

18 August 2014

From The Guardian:

Why are some of the world’s most widely read authors now at daggers drawn with Amazon? The answer lies in Jeff Bezos’s chief lieutenant, now the most powerful man in publishing.

. . . .

Amazon’s mood has soured. Initiatives designed to establish the loss-making firm as a creative powerhouse have stumbled. The most bruising, an effort to push further into online book publishing, has pitched the book industry against the retailer it depends upon.

Similar disputes have plagued other creative industries – the music business with Napster and Apple, screenwriters with Hollywood, but none has been as clearly delineated or as public as Amazon’s escalating battle with the publishing industry. In one corner is Bezos and, more and more significantly, his chief lieutenant, Russell Grandinetti. His official title is senior vice president at Amazon, with special interests in Kindle. Unofficially, he now has a good claim to be the most influential person in publishing.

The e-commerce giant, which sells 40% of all new books and 64% of ebooks, wants lower prices, in part by forcing publishers to take a smaller cut. In the other corner are thousands of authors who fear that Amazon’s efforts to strong-arm the publishing giant Hachette in contract talks by slowing delivery of its titles portends badly, not only for their future but also, according to historian Amanda Foreman, because it threatens the principle of “preserving pathways to free speech and freedom of thought”.

. . . .

At issue, both sides claim, is the future of publishing. And both claim to be the best defender of authors and, by extension, literature itself as it moves from the printed to the digital page on millions of iPads, Amazon Kindles and other e-readers. Like the music industry and newspapers before them, book publishers have found themselves at the sharp end of a technological revolution that threatens to strip away control of pricing and distribution. For the past four months, customers have found it difficult to buy Hachette books via Amazon – the publisher’s books have been hard to pre-order or only available via slower delivery.

The wider argument is largely about price. By dropping the price of ebooks, Amazon claims, authors will sell more – and make more money. An ebook priced at $14.99 that sells 100,000 copies will sell 174,000 if priced at $9.99. Amazon claims frustration that such straightforward maths, in their minds, seems to elude many authors.

. . . .

Grandinetti believes the publishing industry has failed to recognise fundamental shifts in its business. Part of Amazon’s mission, then, has been to jolt an often sleepy industry with revolutionary, customer-focused retailing zeal. The real competition, he believes, is not rival publications or publishers but the entire array of information and entertainment, free or otherwise, available to consumers. “Books compete against mobile games, television, movies, Facebook, blogs, free news sites and more,” he says.

. . . .

Publishers now describe Grandinetti as some sort of evil genius, the power behind Bezos. Under his direction, the company, which rarely comments publicly on issues, has embarked on a series of PR efforts, including sponsoring a rival petition that accuses publishers of running an exclusionary, elitist business in which thousands of authors experience endless rejection.

. . . .

Publishers fear Amazon wants a straight-to-consumer model in which the company develops, promotes and delivers the product. Lower ebook pricing, they say, would reduce sales of physical books and relieve Amazon of the burden of shipping costs that have become a drag on its bottom line.

. . . .

Raising the volume of ebook sales doesn’t necessarily help publishers or authors – they still receive most of their income from print sales – but a firm with the mantra “your margin is my opportunity” is unlikely to offer publishers a sweetheart deal for old time’s sake.

. . . .

“It’s always the end of the world,” Grandinetti says. “You could set your watch on it arriving.” But, he adds, the publishing industry is going through a dramatic shift. “The only really necessary people in the publishing process now are the writer and reader. Everyone who stands between those two has both risk and opportunity.”

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

The war over e-book sales resonates widely as Amazon, Hachette battle

17 August 2014

From The Globe and Mail:

The obdurate war between the giant international corporations Amazon and Hachette – a battle raging far over our heads like the rumble of gods clashing on Valhalla – will affect the future of publishing around the world. But it is also revealing a number of fervently held and basically emotional beliefs on the part of writers. Writers are coming across as a rather conservative bunch.

. . . .

As the media have been reporting for the past several weeks, the online retailer Inc. and the mega-publisher Hachette Book Group (owner of a couple of U.S. imprints, including Hyperion) are in a dispute over the pricing of e-books. Amazon wants to sell them for around $10, and the publisher, like most other publishers, wants full control over the price, and wants that price to be higher (it doesn’t say exactly how much higher, but e-books sell for as much as $16 right now).

. . . .

So far, most U.S. authors have lined up against Amazon, a corporation that has done almost as much for the dissemination of literature as the printing press itself, yet is pretty much universally despised in artistic circles. Amazon’s transgressions against the artistic spirit are many.

For one, it is almost as powerful as a monopoly. It tries to tell publishers what to do in various ways, and most publishers feel they have no choice but to comply. It has put bookstores out of business, and writers love bookstores.

. . . .

And so they are expressing outrage at Amazon’s treatment of Hachette and its innocent authors. In doing so, they confirm the widely held publishers’ view that e-books should be kept at high prices so as to better reward authors for their labour and brilliance.

. . . .

I understand this, but I think authors should reconsider their pleas for expensive books. The idea that literature should be expensive is an odd one for a group that is generally leftist. Books should not be luxury items; books should be everywhere. People shouldn’t have to think hard about clicking that “buy” button.

Odd, too, is the idea that cheaper books will lose money for the creators. Surely, even writers understand the basic business tenet that lower prices lead to greater sales.

. . . .

In bookselling in particular, high volume is your friend: A large readership is the best possible advertisement a book can have, and it will snowball. People sometimes buy books simply because they are bestsellers.

Okay, the writers say, but what about respect for the book – you know, the notion that even though this digital file may cost exactly nothing to send from one storage device to another, it cost the author five years to write and a lifetime to imagine? Do we really want to start to consider books as mere digital files, as inexpensive, easily consumable and disposable, like pop songs?

Well, you may be surprised to hear that as a (doggedly slow) writer of books, I honestly wouldn’t mind if my books were considered cheap-and-easy pleasures, even disposable. It might make more people buy them.

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

Weekend Brunch: Amazon v. Hachette, Axe, and Candy Crush

17 August 2014

From Marketplace:


Thanks to Nikki for the tip.

Amazon channels Orwell in its latest blast

16 August 2014

From veteran publishing consultant Mike Shatzkin:

Anybody who reads Amazon’s latest volley in the Amazon-Hachette war and then David Streitfeld’s takedown of it on the New York Times’s web site will know that Amazon — either deliberately or with striking ignorance — distorted a George Orwell quote to make it appear that he was against low-priced paperbacks when he was actually for them.

. . . .

This argument against Hachette, using authors as proxies and lower-prices-for-consumers as the indisputable public good, once again employs two logical fallacies that are central to their argument that Hachette (and its parent company, invoked to give the appearance of relative equality of size between the combatants, which is still nowhere near the case) is craven and muleheaded and that Amazon is merely engaged in a fight for right.

1. Amazon’s logic is entirely internal to Amazon. It does not attempt to take into account, or even acknowledge, that publishers and their authors are dependent on other channels besides Amazon. And, in fact, the publishers and authors know for sure that the more the sales do concentrate within Amazon, the more their margins will be reduced.

2. The price elasticity statistics they invoke (for the second time in as many public statements), which are also entirely internal to Amazon, are averages. They don’t even offer us a standard deviation so we can get a sense of what share of the measured titles are near the average, let alone a genre- and topic-specific breakdown which would show, beyond the shadow of a doubt, that many Hachette books would not achieve the average elasticity rate. See if you can find anybody with an ounce of statistical sophistication who thinks a book by Malcolm Gladwell has the same price elasticity as a romance or sci-fi novel by a relatively unknown author.

Link to the rest at The Shatzkin Files

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