Joe Konrath

Lee Child Chimes In

25 September 2014

From Joe Konrath:

Joe: Yesterday I asked any Authors United signatory to engage me on my blog.

Lee Child took me up on it.

. . . .

Lee: Here’s my personal take … speaking generally, with a plural “you” … and as a guy entirely unafraid of the future, whatever it may bring – after all, I kicked your ass under the old system, and I’ll kick it under the new system, and the new-new, and the new-new-new, until I retire, or the lung cancer gets me, whichever comes first. I’m completely confident of that, and you’d be an idiot to bet against me. We both started from nowhere, and in the last three weeks I sold more ebooks – of one title – than you have sold in your entire life. Or will sell. Print visibility, you say? How? Print is a niche, according to you, and no one visits bookstores anymore!

Joe: First of all, congrats on selling more than 1.5 million ebooks (which is where I’m at to date) in the last three weeks. I assume I’ll sell a few million more before I kick off, so let’s call my total lifetime sales 5 million. It’s damn impressive that you sold that many ebooks in three weeks of just one title.

But it’s also nearing the end of that era. You’re everywhere books are sold. I’m not. That’s a huge advantage. One I never had. Your massive paper distribution serves as a giant, global advertisement for your ebooks.

. . . .

You may believe the legacy publishing world is a meritocracy. I believe it’s a lottery. No one earns a lottery win. No one is entitled to it.

. . . .

 Lee: And don’t tell me I was lucky or “anointed” or some such … again, we all start from the same place, but I worked harder and smarter than my rivals, and believe me, I’m ready to do it all again … so don’t tell me I’m scared or whining – truth is, I’m licking my lips in anticipation of the big win in whatever scenario comes next.

. . . .

Lee: And let’s settle one thing … the so-called Amazon/Hachette contract … I think you overestimate it, or misunderstand it, possibly. It ain’t the key to some kind of magic kingdom. Almost every sale Amazon makes happens without a contract with the supplier or manufacturer. It used to be that way with Hachette. Hachette sold to wholesalers, at a certain discount, and the wholesalers sold on to Amazon, at a slight markup. Soon Amazon wanted to avoid that markup, so it went to Hachette and asked, “Please will you sell to us direct?” And Hachette said, “OK.” And that’s the so-called contract, right there.

Joe: And then Hachette colluded with four other publishers to force Amazon to accept their new terms, i.e. the agency model. Amazon didn’t want to accept those terms. Not because of the 30/70 split, but because it took away Amazon’s ability to discount.

Suddenly contracts became important. What began as a mutual handshake (assuming you’re correct about this) was no longer acceptable to either party.

Right now, Hachette doesn’t want Amazon to be able to discount. Amazon wants to discount. Since Hachette forced a contract on Amazon–the agency contract–and that contract lapsed, Amazon does not have to sell Hachette’s titles under Hachette’s terms.

. . . .

Lee: But, here’s the thing – by continuing to trade under expired terms, it’s Hachette doing Amazon a favor, not vice versa. Amazon is still getting its protection money – and giving nothing in return right now – and still avoiding the wholesalers’ markup.

Joe: If Amazon wants to charge Hachette to sell its books, it can do that. If Amazon doesn’t want to discount, it can do that. Amazon isn’t a monopoly, and it isn’t the government. Being a tough competitor or being tough with suppliers doesn’t violate any laws.

Lee: If Hachette walked away, Amazon would lose… unless it was prepared not to carry Hachette titles ever again. Which it isn’t, because Amazon’s whole theory is to be the go-to, first-stop, everything store. “I’ll get it from Amazon” is what they depend on hearing. “I wonder if Amazon has it?” would be the kiss of death.

Joe: I believe you overestimate the value of Hachette’s catalog to Amazon.

. . . .

 Lee: Which is why the dispute is so intractable. It’s half-rational, half-emotional. And flawed – Amazon wants more protection money now (yes, it’s really that simple) but it isn’t prepared to get up from the table and walk away. Neither is Hachette. Hachette’s best play – logically – would be to walk away and suffer a few lean years before an alternative presented itself. I’m absolutely sure its parent company wants it to do that, and would support it in so doing. Huge European corporations are good at the long game. But local management is resisting, because the hiatus would derail too many careers. Again, half-rational, half-emotional.

. . . .

Lee: It’s staggeringly naïve to think the current KDP landscape is anything other than a short-term tactic. Note well – I am NOT saying don’t get into it now just because it will get worse in the future… instead I say, hell yes, make hay while the sun shines. Exploit Amazon’s game plan for all you can get, as long as it lasts, and more power to you. But understand that today’s KDP is a pressure point, designed to suck authors out of the established system, along with sucking out money and margin by other routes. Truth is, it ain’t working great so far – no significant authors have jumped ship, and publishers are still profitable. But Bezos never gives up.

And if he wins… then we all have a problem. Note well – I am NOT talking about nurturing or culture or curating or any of that kind of non-existent crap. I’m talking about money. Amazon is a tech company. The basic tech paradigm says content is always the smallest part of the cost. Those guys really believe that. Storytellers will be working for whatever few pennies they choose to hand out. (Or some will. I’ll be doing something else by then. I don’t work for pennies.)

Joe: Most of us already have a problem. It’s with publishers like Hachette. Right now, Hachette, and the rest of Big Publishing, treat the vast majority of authors as the smallest part of their costs.

Hachette authors are getting screwed, working for pennies. And Hachette’s insistence on keeping ebook prices high to protect its paper oligopoly will continue to hurt all authors but the very top of the heap (such as yourself).

On the other hand, Amazon is allowing many authors to make money for the very first time.

Link to the rest at Joe Konrath and thanks to Barb for the tip.

My Advice to Authors United

24 September 2014

We get a double helping of Joe today.

From Joe Konrath:

While they haven’t lacked for biased media attention, they aren’t swaying Amazon, and aren’t swaying public opinion. Amazon’s approval rating has gone up since the Hachette negotiations went public, and readers don’t give a hoot about a bunch of rich, entitled authors whose pre-order buttons are gone.

Whining in public, wasting money on a $104k NYT ad, and whining in public some more, has accomplished the opposite effect of what they intended. Instead of getting sympathy and results, they’ve gotten a taste of the future. Namely, what the world will be like when their publishers aren’t maximizing their sales potential.

Amazon is just the tip of the iceberg, you see. Yes, Hachette authors are currently losing sales. But Amazon has no contract with Hachette, and has no obligation to sell any Hachette titles at all. When Amazon completely stops selling Hachette books, Hachette’s midlist will die. B&N and indie bookstores don’t constitute enough sales to justify a 40k paperback run, and printing fewer than that isn’t cost-effective.

. . . .

My mother held out during the VHS to DVD transition. She didn’t buy a DVD player… until she had to, because they stopped selling VHS.

When this happens with ebooks–when the casual reader switches to a tablet app or cheap dedicated ereading device–it will hurt more than bookstores. All those folks who read 1 to 5 books a year (the ones who make the mega-bestsellers, of which many are Authors United signatories) will no longer get their summer reads at drug stores or airports. They’ll simply download something.

All that prime real estate, putting mega-selling authors in front of peoples’ eyes with widespread paper distribution, will be gone. Then James Patterson will be stuck with ebooks as his major source of income. If he’s lucky, Amazon will still be selling his work, albeit for $12.99 with DRM and no Kindle Unlimited. If he’s unlucky, Hachette will never capitulate, and Amazon will stop selling him altogether.

Consider the French Revolution. A bunch of blue bloods really thought they were born to rule, and the peasants couldn’t live without them to govern. They were wrong.

Guess what? The reading community can easily live without books from every single Authors United signatory. Sure, some fans will be disappointed. But those fans will find other things to read. Just like I’ve been waiting for years for another Evil Dead film, but I’ve managed to find other movies to watch. The lack of Evil Dead 4 didn’t mean I quit watching all films. The lack of Douglas Preston’s latest in the supermarket check-out rack doesn’t mean Preston fans won’t find something else to read.

. . . .

Hachette is cutting its own throat. By trying to protect its paper cartel, it is pushing readers away from its own catalog, and toward ebooks.

Hachette feels it has no choice. Unless they prevent Amazon from discounting ebooks, paper will die anyway. So why not go the contentious route and ruin the careers of hundreds of authors?

If other publishers follow Hachette’s example, they’ll fail. But if they allow Amazon to discount ebooks, they’ll also fail. Their paper oligopoly will suffer either way.

You fight technology, technology always wins.

But new technology, and the Amazon juggernaut, aren’t the only nails in the legacy industry’s coffin.

Authors United has tried to wage its battle in the court of public opinion, using the media to spread its nonsense. But it has discovered that readers don’t care.

. . . .

Authors United is an ironic name for a group that is prompting authors to take sides. It is reinforcing the path indie authors have chosen, and embarrassing many who chose the legacy route. Publicly bitching that Amazon is hurting authors–when it is obvious that Amazon has an open door policy for authors via KDP and it is actually Hachette’s inability to negotiate that is hurting authors–will scare more authors away from the Big 5. I was actually just talking with a bestseller who isn’t going to even bother submitting a new book to the Big 5 out of a very real concern that they won’t be able to sell via Amazon.

It’s all a big, oven-baked plateful of fail with a generous slice of stupid for dessert.

Link to the rest at Joe Konrath

The Name Game

24 September 2014

From Joe Konrath:

The Hachette/Amazon situation has become a true comedy of errors. It’s like watching Groucho Marx lead Freedonia into war by intentionally being greedy, dishonest, and self-serving.

. . . .

I go back and forth [about Authors United]. Think-tank forced to defend an unwinnable debate, or self-deluded pinheads?

. . . .

Collectively, they feel threatened, and there really aren’t any good ways to defend their sense of entitlement, so they have to zero in on the same nonsense they’ve been preaching for years; protectors of culture, nurturers of writers, champions of indie bookstores, and defenders of fair business practices. Amazon is using “sanctions” and “boycotts”, Amazon is a “monopoly” that is “targeting” authors.

This is all very specific language that the status quo has collectively adopted in order to spin the real story.

. . . .

Authors United can’t win on logic, facts, or even common sense, so they are appealing to emotion to sway public opinion, and the language they’re using is tailored to that. So the same lies keep getting trotted out, with Authors United hoping that the public will start repeating them and public opinion will side with them.

I’m going to put the buzz words that are being repeated in italics, and explain why they’re fallacious.

Amazon is not a monopoly. But people know monopolies are bad and illegal, so the term keeps getting used.

Publishers don’t create culture. They don’t create anything; authors do. But Authors United wants you to believe publishers are indispensable. And they aren’t.

Books aren’t commodities. Well, yes, they are. They’re bought and sold, after all. AU wants to say they aren’t, that people recognize the importance of literature and are above crass, plebian capitalism. But publishers print prices directly on book covers — if that’s not a product, what is?

Writing is a job. It isn’t some special calling for the elite. It isn’t some form of magic where the shaman practitioners must be deified. I’m a writer, and damn lucky to be one, but I’m no better than someone who makes toasters on an assembly line.

. . . .

Amazon isn’t reducing book discounts. They’re pricing books according to the prices Hachette itself stamps on books. They aren’t refusing preorders, either. Is it a smart practice to sell titles that haven’t been released yet when there is no surety that they’ll ever be able to fulfill those orders if they can’t come to terms with Hachette?

Amazon isn’t punishing writers who are helpless. Writers are only helpless in that they signed a contract with a publisher who refuses to negotiate with Amazon because the publisher wants to protect its paper oligopoly by keeping ebook prices high. Amazon isn’t negotiating with writers, it is negotiating with Hachette. Writers are collateral damage–and writers put themselves in harm’s way by signing with a member of a cartel with a specific agenda.

. . . .

Writers, who in the past were afraid to speak out against publishing nonsense like this because they didn’t want to be blacklisted, are now actively pointing out how asinine publishers, and authors, are acting. Authors United, in its effort to win public support, has become a laughingstock. The publishing industry, and status quo authors, despise the term “legacy” to describe them. But it is an apt term, and is becoming widespread.

. . . .

It means the legacy industry has lost control. In the past, it was the only game in town. It controlled the only kind of book distribution–paper distribution. If you wanted to get onto bookstore shelves, you had to deal with a legacy publisher because they had a lock on it. You also had to accept unconscionable contract terms as a writer, because it was that or nothing.

Link to the rest at Joe Konrath and thanks to Daniel for the tip.

Here’s a link to Joe Konrath’s books

Nonsense United

15 September 2014

From Joe Konrath:

And Authors United confirms that a group can indeed be less than the sum of its parts when it acts in such a blatantly stupid way. But, like any group of likeminded people bonded together by mutual ignorance, they can persuade the legacy media tools at the NYT and The Bookseller to run their biased propaganda without any counterpoints.

Fails all around.

Their recent letter almost isn’t worth fisking. Really. It’s so poorly done, such a flimsy, whiny argument, that a child could deconstruct it.

But I didn’t have a child available, so I did it.

. . . .

Dear [name],

We are writing to you in your capacity as a director of Amazon.com, Inc. As we all know, Amazon is involved in contract negotiations with several media and publishing companies, including Hachette. About six months ago, to enhance its bargaining position, Amazon began sanctioning Hachette authors’ books. These sanctions included refusing preorders, delaying shipping, reducing discounting, and using pop-up windows to cover authors’ pages and redirect buyers to non-Hachette books.

Didn’t take long for the BS to begin.

This began in January, not six months ago, because Hachette refused to negotiate with Amazon prior to their contract with Amazon expiring.

Amazon has had no contract with Hachette for several months. And yet it still sells Hachette titles, while under no obligation to do so.

Refusing preorders – Why should Amazon sell advanced copies of work when they might not be selling any Hachette titles in the future if an agreement can’t be reached?

Delaying shipping – Amazon has said they aren’t delaying shipping, they simply aren’t stocking Hachette titles. If Hachette wants faster shipping, they should get their titles to Amazon faster.

Reducing discounting – Oh noes! Amazon is selling books for the prices that Hachette sets!

Using pop-up windows – First I’ve heard of this, and the few minutes I took clicking on Hachette titles on Amazon failed to produce any results. But if it is true, let’s look at the big picture:

1. Should Amazon be allowed to do whatever it wants to on its own website? Sell what it wants to, for prices it wants to? Sell ad space if it wants to? Stock what it wants to? Ship how it wants to?

2. If a retailer isn’t behaving like the supplier wants it to behave, should the supplier fight for better terms? Leave? Negotiate in good faith? Capitulate?

For some reason, Authors United believes that publishers have the right to tell Amazon, Bezos, and the board of directors, how to run their store.

Now, the US has a history of third parties trying to intimidate retailers. But at least the mob did it effectively. Authors United seems to be using the intimidation tool of shame.

Shame doesn’t work. I know this for a fact, because I’ve repeatedly shamed Authors United signatories to stop their nonsense, and they haven’t.

But I’ll keep trying. And I won’t have to try very hard. Seriously, read on, it gets extremely humiliating.

. . . .

This is an obvious fact. We all have choices. Amazon chose to involve 2,500 Hachette authors and their books. It could end these sanctions tomorrow while continuing to negotiate. Amazon is undermining the ability of authors to support their families, pay their mortgages, and provide for their kids’ college educations. We’d like to emphasize that most of us are not Hachette authors, and our concern is founded on principle, rather than self-interest.

So now Amazon owes authors a living?

I’m amazed by the permeating sense of entitlement in this letter. These authors believe the system owes them. And I say this as someone who was at the mercy of legacy publishers for a decade. I know what it’s like to have my dreams, hopes, and finances screwed by the whims of a giant corporation.

But here’s the thing: I signed those one-sided, unconscionable publishing contracts. I went into them willingly. And when something better came along, I got the hell out.

Authors United, your gripe isn’t with Amazon. You didn’t sign a deal with Amazon. You can self-publish with Amazon right now and get preorders and fast shipping and price your books as you wish.

Your problem should be with Hachette. Hachette, who wants to keep ebook prices high, even as you lament Amazon’s lack of discounting. Hachette, who cares more about its part of the paper distribution oligopoly than it does about its authors. Hachette, who you HAVEN’T CONTACTED YET.

. . . .

Books are not toasters or televisions. Each book is the unique, quirky creation of a lonely, intense, and often expensive struggle on the part of a single individual, a person whose living depends on that book finding readers. This is the process Amazon is obstructing.

We, at Authors United, are better than people working in China. We’re better than people who make toasters and televisions.

We’re special snowflakes, unique and quirky, and the lonely, intense struggle we endure for the sake of ART is much more difficult than coal mining or waitressing or mechanical engineering or brain surgery or conservationism or rocket science.

If I ever reach this level of self-importance, I want someone to slap the shit out of me.

Seriously. Slap me until I shit all over myself. It would be less embarrassing than agreeing with the above Authors United paragraph.

When all you have to do to humiliate someone is hold up a mirror, it’s time to stop making public statements.

Link to the rest at Joe Konrath

Here’s a link to Joe Konrath’s books

Author Conference of the Future

13 September 2014

From Joe Konrath:

If it ever does happen, this is how I’d picture it:

One giant room, similar to ComiCon, with a stage and microphones.

Authors sit at tables, which are set up everywhere. For table space at the 3 day conference, authors pay $25 a day.

Attendees get in for free.

Authors bring their own paper books to sell. They can accept cash, or credit cards via PayPal Here.

Authors can bring cardboards stands, giveaways, whatever they’d like to make people come to their tables. I suggest having QR codes on promo material, so attendees can instantly buy ebooks.

Conference fees pay for the room space, advertising, and maps that show where the authors are on a numbered seating chart (also name plates and name tags for authors) and the schedule for the author talks.

. . . .

Any author who wants to appear on the main stage in book room to talk for 15 minutes can, for an additional $50. Authors who want to appear on panels can book a block of time together (for example, 3 authors on stage at the same time would get 45 minutes and it would cost a total of $150).

In addition to the main room, there will be additional side rooms available as needed. If an author (or group of authors) want to appear in a side room to speak, it is $25 for 15 minutes per author.

. . . .

Fans get in for free, which will allow them to spend more money on books.

All authors can sign for as long as they want to.

All authors can speak for as long as they want to, on whatever topic they choose.

Even if an author has a table every day, and talks every day, the max they’ll spend is $175. This is cheaper than most conferences, with a lot more visibility.

Link to the rest at Joe Konrath and thanks to Eric for the tip.

The Opposite of Legacy

30 August 2014

From Joe Konrath:

So I just read the latest drivel from The Guardian which completely misrepresents self-publishing. There’s no need for me to fisk it–Howey, Eisler, Gaughran, and others already shredded the stupid in the comments. And there was a lot of stupid. It makes me ponder how the mainstream media keeps getting so much wrong.

It also makes me ponder why self-pubbed authors care.

As far as mainstream media, I can point to lazy reporting, willful ignorance, nepotism, and not-so-hidden agendas. This blog has a long history of pointing out why legacy publishers do what they do, and their priorities often coincide with those of the legacy media.

. . . .

Years ago, Eisler used “legacy” to describe traditional publishing, and I’ve played a small part in popularizing the term on this blog. Indeed, the paper publishing industry is a legacy system. There are now faster, cheaper, and less-restrictive ways to get words to consumers than the antiquated method of acquiring, printing, and shipping.

The legacy publishing world knows this, and they have been putting up a continuous, united front to preserve this status quo while doing their best to inhibit the widespread adoption of ebooks. They’re so single-minded in this pursuit, that they are missing opportunities to capitalize as much as they can on this new tech, instead trading potentially higher profits to retain a paper oligopoly.

I call self-publishing a shadow industry because the mainstream has steadfastly refused to understand its scope and power. Self-publishing is the most serious threat that legacy publishers must face, but legacy publishers don’t realize it is a threat. They don’t see the money being generated. They don’t see the scale of authors adopting it. They haven’t been hurt enough to acknowledge that a revolution is even taking place.

. . . .

If the mainstream news is just as antiquated, biased, self-interested, and increasingly obsolete as mainstream publishing, isn’t it also a legacy system? Hachette isn’t reading my posts and admitting I’m right, then following my advice. Why would The Guardian or the NYT or PW listen to me or any other self-pubbed author? The legacy media are facing the same problems as legacy publishing; digital replacing paper, readers going elsewhere for information and entertainment, talent creating content without them and building their own followings and fanbases.

As a writer, I once craved the validation that came with a legacy publishing contract. I felt it legitimized me. Once I was accepted, I experienced a sense of fulfillment. Getting a PW starred review was a victory. Seeing my book on a library shelf was its own reward.

Now I realize how empty those feelings were. Getting paid well and being treated fairly is much more fulfilling that the approval of a clique. Having power and control over my career trumps seeing my book in Wal-Mart. I don’t care what the legacy publishing industry thinks of me, or of self-publishing. We’re going to outlast them.

. . . .

What is happening is an echo chamber on both sides. Legacy authors, and those who want a chance to be legacy authors, continue to defend the status quo. Indie authors continue to point out the stupidity exhibited by legacy authors, publishers, and media. The only time anyone will change their mind is when they have direct experience of one, the other, or both.

. . . .

Evolution isn’t about choosing sides. It’s about slowly adapting to new environments. The Guardian doesn’t want to adapt? They’ll be forced to deal with the consequences of their actions. Click bait and concern trolling isn’t going to pay their shareholders. Like the Big 5, the days of Big Media in its current form are numbered. There is still some money to be squeezed out of it, but status quo bias is an indicator of desperation, not growth.

Self-publishing may always be a shadow industry. The media may not ever discuss it. The Big 5 will continue to ignore it. And that’s okay.

As writers, we can continue to inform one another, share data, and point out stupidity. This is helpful.

But it isn’t vital. Change will come even if we all remain silent.

Link to the rest at Joe Konrath

Here’s a link to Joe Konrath’s books

As usual, Joe makes some excellent points.

It doesn’t matter what the Guardian or the Times say. It doesn’t matter what a group of rich tradpub authors say. The PR strategies of Hachette and other large publishers will have no effect on the ultimate outcome of the disruptive change that is taking place in the way books are created and consumed.

Technology disruption is based upon some iron laws, some of which are relevant to the book business:

1. Cheap beats expensive.

2. Even if cheap isn’t as good as expensive at the beginning, it will catch up.

3. Bits always beat atoms for the dissemination and consumption of information.

The contents of books are information. Bits – the basis of digital representations of information – are virtually free. Yes, the infrastructure required to distribute and consume bits isn’t free, but once it’s in place, sending trillions of additional bits through that infrastructure is virtually costless.

Nobody charges you any more money when you download hundreds of ebooks from Project Gutenberg instead of just one book. It costs Amazon almost nothing to make and distribute 100 copies of an ebook file to sell to 100 different customers. Credit cart fees are probably the largest per-ebook cost for each incremental sale.

Traditional publishers are primarily focused on the atoms business – hard copy books. Traditional bookstores require a lot of atoms – bricks, bookshelves, etc. – to remain in business. Atoms cost money. The atoms for two bookstores cost more than the atoms for one bookstore.

The value-add of traditional publishers is all on the atoms side. Creation of physical books is an industrial-age process involving paper mills and printing presses and ships and trains and trucks moving boxes of books around, ultimately delivering them to those big stacks of atoms called bookstores.

Success in the industrial, mass-production world of atoms requires scale. Huge publishers dealing with millions of physical books have a substantial financial advantage over individual authors in a world where mass quantities of atoms are cheaper to create and deal with on a per-atom basis than smaller quantities of atoms.

Life is much different in the post-industrial world of bits. An author sitting at a personal computer can create all the bits necessary for an ebook without any assistance from any third party or any incremental cost. A personal computer costs as much if you use it for surfing the web as it does if you use it for writing a book.

Once an author creates the bits for an ebook, the author can send those bits to a dozen ebookstores for no additional incremental cost. An internet connection costs as much if you use it for surfing the web, etc., etc.

Once the bits arrive at the ebookstore, those bits can be offered for sale at an infinitesimally small incremental cost to the ebookstore.

The ebook monetization process includes no industrial-era components and no industrial-era advantages for Big Publishing. Not only is the author is the most important part of ebook commerce, the author is the only necessary part of that process other than an ebookstore.

At the moment, the atoms-world publishers are leeching off the bits-world of ebooks and ecommerce, but their ability to continue to do so is entirely dependent upon the willingness of authors to be hosts to which the leeches attach.

As Joe implies, the enthusiasm tradpub authors express for the legacy publishing business is in direct proportion to their ignorance of what is happening in self-publishing. To put it very directly, the dumber the author is about self-publishing, the more likely he/she is to be an ardent supporter of Big Publishing.

William Ockham Fisking Michael Pietsch

11 August 2014

From William Ockham via Joe Konrath:

William: In case you haven’t heard, Hachette (US) CEO Michael Pietsch is sending out a response to the emails he’s getting. DBW has it: http://www.digitalbookworld.com/2014/hachette-ceos-response-to-amazon-advocate-emails-why-we-price-books-the-way-we-do/

As you might imagine, I have a few comments:

Thank you for writing to me in response to Amazon’s email. I appreciate that you care enough about books to take the time to write. We usually don’t comment publicly while negotiating, but I’ve received a lot of requests for Hachette’s response to the issues raised by Amazon, and want to reply with a few facts.

• Hachette sets prices for our books entirely on our own, not in collusion with anyone.

William: Seriously? This is how you start? That’s a bad strategic move because you lied about not colluding in the past and you never apologized for it. We all know you colluded. You know you colluded. You may think that this statement is true because you aren’t currently colluding with anyone, but until you admit that you colluded in the past, it’s just bullshit. And, by the way, you best be careful. Any evidence of coordination with your former co-conspirators will land you back in court. The evidentiary requirements for antitrust collusion is really low. Even coincidentally ending up with the same proposed terms as other Big 5 publishers could be trouble. Recycling the same old price list that you and your co-conspirators adopted in 2010 seems like an astoundingly bad idea.

. . . .

As a publisher, we work to bring a variety of great books to readers, in a variety of formats and prices. We know by experience that there is not one appropriate price for all ebooks, and that all ebooks do not belong in the same $9.99 box. Unlike retailers, publishers invest heavily in individual books, often for years, before we see any revenue. We invest in advances against royalties, editing, design, production, marketing, warehousing, shipping, piracy protection, and more. We recoup these costs from sales of all the versions of the book that we publish—hardcover, paperback, large print, audio, and ebook. While ebooks do not have the $2-$3 costs of manufacturing, warehousing, and shipping that print books have, their selling price carries a share of all our investments in the book.

William: Blah, blah, blah. Don’t you guys get tired of this line of argument? I’m sure tired of pointing out how completely bogus it is. But since you are the CEO of a big publishing company, I assume you know a little something about economics. Let’s talk about the marginal cost of production. The short version of the definition is that it is the cost of producing one more unit of something. The marginal cost of producing one more print book is the cost of producing a single copy of a POD book. The marginal cost of producing one more ebook is $0. There are some transaction costs associated with selling that additional unit, but they are less than the transactional costs of selling the additional unit of a print book. And let’s not forget that print books have resale value that ebooks don’t. I’ve done some economic modeling of this and I find that the difference in price between a hard cover and an ebook version of the same title would tend towards about $5-$7. That’s the price differential that would maximize revenue and sales across a broad range of titles. Interestingly enough, that’s about the differential that Amazon is arguing for. That’s not really surprising to me because they are a retailer with lots of data on book sales. Here’s the crux of the matter. The market doesn’t care about your costs or business model or expense allocations. They are irrelevant. Hachette has a very high cost structure for producing ebooks. In one sense, Amazon is doing you a favor, long term, if they force you to confront that reality now.

Link to the rest at Joe Konrath

David Streitfeld – An Embarassment to the New York Times

9 August 2014

From Joe Konrath:

Barry sez: When it comes to Amazon and Hachette and all that, there’s just too much partisan posturing posing as journalism to tackle, and most of it Joe and I ignore. But in his latest New York Times blow job to big publishing, anti-Amazon activist David Streitfeld jumps so far over the shark that we had to mock his tendentiousness, which was excessive even by Streitfeldian standards.

. . . .

Barry sez: Hah. We’re just teasing Preston, who tries to paint himself as an aw, shucks regular guy but who “summers in this coastal hamlet… set on 300 acres that have been owned by the Preston family for much of the last 100 years.” All of which sounds about as blue collar as it gets! Why would anyone suggest this guy is of and for only the one percent of authors?

As for my libation tonight, I’m just having a Fat Tire ale. My second, to ease the pain.

Okay, let’s get this over with…

First, I want to emphasize something we mentioned in yesterday’s post on James Patterson’s CNN opinion piece. Which is, publishing darlings like Preston and Patterson get easy access to all the establishment media they want. Last month’s fawning (and tendentious) Preston interview was by Vauhini Vara in The New Yorker; today it’s Streitfeld in the New York Times. And on Sunday, Preston et al will buy a ton of coverage with an $104,000 ad in the New York Times, for which the Streitfeld piece reads like a coordinated warm-up.

. . . .

This is another one we wrote about yesterday, and as we said there, it’s practically a staple of the Amazon Derangement Syndrome crowd. For people like Streitfeld, that Amazon might, like other companies, be motivated by business reasons and not some cartoonish Dr. Evil imperative of World Domination isn’t conceivable. Certainly the possibility is never entertained; Amazon is Evil And Wants To Take Over the World is just a constant, background, unexamined axiom, one of those things Streitfeld simply knows and which therefore require no evidence.

. . . .

NYT: Amazon, unsettled by the actions of a group that used to be among its biggest fans, is responding by attacking Mr. Preston, calling the 58-year-old thriller writer “entitled” and “an opportunist,” while simultaneously trying to woo him and his fellow dissenters into silence.

Barry sez: Credit where due: Preston has done a nice job of propagating that “woo him into silence” meme. But what I always wonder is this. Why is it a bad thing that Amazon, which has no direct relationship with Preston, has reached out to him? And why is it a good thing — how can Preston be proud — that he’s “not even in contact” with his own publisher on this matter? Wouldn’t he like to find out from his own publisher what this dispute is about (he admits he doesn’t even know himself)? Why doesn’t Streitfeld think to even ask about any of this?

Either Streitfeld is stunningly incurious for a reporter… or something else is going on.

Anyway, I don’t know why anyone would call Preston entitled. Everyone knows that’s only readers. And it’s not as though Preston worries, in this very article, “What if Amazon says, ‘Why should we sell Doug Preston’s books? He’s a thorn in our sides.’ Guess what? All this [the coastal hamlet and spacious and splendid house, presumably] goes away.” Because, absolutely, Douglas Preston has a right to have his wares stocked by all retailers, no matter what. Don’t we all? What’s entitled about that?

Joe sez: And “wooed into silence.” Amazon, in a self-serving display guaranteed to provoke disgust, tried to bribe Preston into shutting up by offering to help the authors Preston said were being harmed.

Way to misrepresent, Streitfeld! Amazon reaches out to Preston to work with him and address his concerns, and they are accused of trying to silence him. And Preston stupidly, selfishly, and instantly rejects the proposal, perpetuating the harm that his letter allegedly is trying to stop.

Preston’s monumental ignorance is only overshadowed by Streitfeld’s terrible reporting.

Link to the rest at Joe Konrath 

For the Authors Guild & Other Legacy Publishing Pundits

4 August 2014

From Joe Konrath:

Recently on Twitter, Barry Eisler asked with sincerity, “Why would anyone want to join the Authors Guild?”

Bestselling author and celebrated indie, CJ Lyons, whom the AG mentioned as an example of diversity, responded with, “What’s your wish list for a Guild?”

Barry didn’t miss a beat, and immediately replied that the Authors Guild should change its name to reflect its fundamental purpose, because the Guild clearly represents legacy publishers more than it represents writers.

. . . .

So here is my wish list:

1. Support the authors in the Harlequin lawsuit and fight to get their backlist rights returned. Then do the same for all members who want to get their backlist rights returned.

It’s no secret I got my rights back, and there are hundreds, if not thousands, of other authors who want theirs back, too. It’s the single most asked-question I get via email, and my required response is that my publishers and I parted amicably, which is the limit of what I can say. I can’t help. But the AG could.

2. Draft a petition to raise ebook royalties for all authors. If a publisher doesn’t comply, these authors will no longer submit work to that publisher. If you could align with a like-minded AAR, real change could be instituted.

The Guild has stated publicly that they don’t believe 25% of net is fair. Well, DO SOMETHING ABOUT IT.

3. Demand that unconscionable contract terms are removed in legacy boilerplate, including holding rights for term of copyright, impossible rights reversion clauses, the elimination of non-compete clauses, the elimination of first option clauses.

A guild for authors would not only pressure publishers to return rights that they’re sitting on without making any discernible profit, but it would also use attorneys to get the DOJ to examine the unconscionability of publishing contracts. I can’t think of a more lopsided abuse of power than the paper oligopoly controlled by the Big Publishing cartel for the last fifty years, and how many authors have been forced to take ridiculously one-sided terms in order to get their books into bookstores.

Seriously. This is perfect for a class action suit.

. . . .

 7. Coordinate with David Gaughran to petition and publicly disapprove of any publisher engaged in vanity publishing. As far as I’m concerned, Gaughran should be a paid consultant for the Guild on this issue. And if the AG were behind him, with some legal muscle, predatory vanity publishers could be crippled, if not erased.

. . . .

11. An Author’s Guild worthy of the name would be all over the legacy practice of paying out royalties only twice a year.

As suggested int he comments by Barry Eisler: In the 21st century, this practice is a disgrace and it’s astonishing that anyone can take it remotely seriously. Yes, I know legacy publishers earn millions of dollars in interest by holding onto that money for six months at a time instead of putting it in author pockets promptly. But why does the “Authors Guild” let them get away with it?

Hint: a cynic might suspect it’s because fat cats like Scott Turow, the former Guild president, get paid advances so large it’s understood they will never earn out. Turow himself, in a rare moment of clarity and candor, acknowledged as much: “Best-selling authors have the market power to negotiate a higher implicit e-book royalty in our advances, even if our publishers won’t admit it.” So authors like Turow never get paid in royalties, meaning that for Turow, yearly, monthly, even daily payments are an irrelevance. He gets all his money upfront.

By the way, for any legacy apologist inclined to argue that paying authors more frequently than twice a year would be oh-so-difficult, Amazon pays its authors monthly. And I’d like to hear of any other business in the 21st century that pays its people twice a year.

Or to put it another way: if all legacy-publisher employees agree to switch from being paid monthly to being paid twice a year, I’ll relax a bit on this issue.

Link to the rest at Joe Konrath and thanks to Bridget for the tip.

Here’s a link to Joe Konrath’s books

PG says it’s often easier to build a new house than it is to fix up the old one.

PG agrees with Joe that the only authors’ organization with enough power to influence traditional publishers is one with a credible litigation fund. Even very large organizations pay attention to a well-drafted civil complaint. (No, PG doesn’t do litigation any more but in the past, he has had some delightful experiences litigating against organizations much larger than any publisher.)

Barry & Joe Discussing The Guardian Discussing AuthorEarnings

20 July 2014

From Joe Konrath and Barry Eisler:

Joe sez: Yesterday, the Guardian reviewed aspects of the latest AuthorEarnings report in an article called, Self-publishing Surging to 31% of Ebook Market, Claims Report.

Barry sez: I’m a big Guardian fan and think it’s great that they’re covering the data AuthorEarnings has been crunching — data that contradicts a lot of misinformation and legacy industry propaganda. I also think it was entirely sensible for them to reach out to Philip Jones of The Bookseller and Nicola Solomon of the Society of Authors for a contrary view.

Joe sez: Maybe they also could have reached out to you for a supporting viewpoint, since you have written for the Guardian. Maybe they didn’t have time, or see the need. But I see this as a biased piece questioning AuthorEarnings data.

Barry sez: Well, we can always argue about “balance” or whatever in these matters. In general, I like to see a contrary view. My concern about Jones’s and Solomon’s views isn’t about whether they were pro or con; it’s more that they weren’t very coherent.

. . . .

Guardian: According to the Bookseller editor Philip Jones there are “large question marks” about Howey’s data.

“This is a very narrow selection of a particular type of market at a particular time,” he said. “Most people who’ve looked at this in any depth say you can’t extrapolate from bestseller rankings on the Kindle store to a picture of the wider market. Howey sees an ice-cube, and shrieks ‘iceberg’.”

Barry sez: Wait a minute… “a very narrow selection of a particular type of market at a particular time”? They’re tracking over 100,000 titles! But hang on, let’s ask Data Guy himself…

Data Guy sez: The Author Earnings reports are cross-sectional studies of Amazon ebook sales.

The raw data for each is obtained by a custom-coded Java web Spider software program that crawls the thousands of Amazon category Best Seller lists page by page and then “reads” the Amazon product pages for each of the 100,000+ listed books, extracting each book’s title, author, publisher, price, overall Amazon Sales Rank, review counts and scores, and DRM info. It works by parsing the raw html of ebook product pages, following links through all the main and then sub categories. Anything on a product page can be pulled into a spreadsheet cell.

The methodology involves an interplay of four factors: 1) The known overall rank of each title on the Kindle store. 2) The estimated daily sales for those ranks. 3) The sales price of the ebook. 4) And the royalty paid to the author.

1) Is known. 2) Has been compiled by dozens of indies, who note their daily sales at varying ranks, and these rates match up and are regularly re-checked. 3) Is known. 4) Is known for self-published titles and well-estimated for all others.

You can tweak (2) and (4) as much as you want and not break the conclusions found in our reports, which is that self-published authors have taken sizeable market share of ebook royalties on the largest bookseller in the world.

Joe sez: I believe the only way to deny the results of the AuthorEarnings data is to say that Amazon sales rank doesn’t correlate to the number of books sold. Which is VERY presumptuous. When Amazon sneezes, a thousand indies check Jeff’s pulse. If Amazon was tampering with rank, someone would be able to show it.

Almost all media sales follow a power curve. Looks like a hockey stick. You can adjust this curve all you like, but since the distribution of indies to traditionally published authors is even and consistent, it doesn’t change the results. Move a legacy book up in sales by its rank, and the neighboring indies go up. Move an indie book down in sales per rank, and neighboring trad books go down.

What Data Guy discovered, in essence — by looking deeper into the data than anyone had before — was three things:

1) It isn’t just indies in the top 100 taking up 25 – 30% of slots; it goes all the way into the top 100,000+ titles on Amazon.

2) It isn’t just 99 cent works selling at high clips; it’s a range of prices.

3) The difference in royalty rates (5.6x) more than makes up for the difference in price and ranking.

What is the opposing argument? I haven’t heard it from Jones or Solomon…

Link to the rest at Joe Konrath

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