Amazon v. Hachette

Why the Amazon–Hachette Deal Is Likely Good for Writers and Publishers

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This article by Vauhini Vara originally appeared on The New Yorker on 11/14/14.

The end of the months-long impasse between Amazon and Hachette over e-book pricing was a bit anticlimactic for those who had been watching the drama unfold. For months, the companies and their supporters had been accusing each other of bad behavior, warped motives, and plain dimwittedness. At one point, Amazon, apparently hoping to put pressure on the publisher, began delaying shipments of hard copies of Hachette-published books ordered through its site, to the ire of those books’ authors. In response, many writers signed an open letter from a group called Authors United, begging Amazon to back off; later, Authors United announced that it would ask the U.S. Department of Justice to investigate whether Amazon’s delays, or other tactics, amounted to antitrust violations.

Journalists covered each of the escalations attentively, and the negative publicity hurt Amazon’s reputation and maybe even its bottom line. The company posted disappointing earnings results in late October, including the slowest growth it had seen for North American media sales (which includes books, movies, and music) in more than five years. But then, on Thursday morning, the companies issued a joint press release announcing that they have agreed to make Hachette responsible for setting e-book prices, as Hachette is thought to have sought. It is believed that Amazon, which has typically favored keeping e-book prices low, had hoped to set those prices itself. Instead, with this agreement, Amazon will, according to David Naggar, Amazon’s vice-president for Kindle, offer “specific financial incentives for Hachette to deliver lower prices.” The agreement will take effect in early 2015.

 

Read the full article on The New Yorker.

 

The War of the Words

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This article by Pete Gessen originally appeared in Vanity Fair‘s December 2014 issue.

Amazon’s war with publishing giant Hachette over e-book pricing has earned it a black eye in the media, with the likes of Philip Roth, James Patterson, and Stephen Colbert demanding that the online mega-store stand down. How did Amazon—which was once seen as the book industry’s savior—end up as Literary Enemy Number One? And how much of this fight is even about money? Keith Gessen reports.

 

I. Discovery

Otis Chandler is a tall, serious, bespectacled man in his mid-30s whose grandfather, also named Otis Chandler, used to own the Los Angeles Times. Chandler grew up in Los Angeles, attended boarding school near Pomona, and then, like his father and grandfather, went to Stanford. Upon graduation he entered the computer field. Because it was the turn of the millennium, that meant working at a start-up: Chandler found a job at Tickle.com, which was an early venture in social networking. At Tickle, Chandler eventually became a project manager, starting a dating site called LoveHappens.com. It did O.K. In 2004, Tickle was acquired by Monster Worldwide, parent company of Monster.com, the huge job-posting site, and about a year and a half later, Chandler left.

He started to think about what he should do with himself. One day, while visiting a bookish friend, he had what he calls an epiphany. “He had one of those bookshelves in his apartment,” Chandler told me when I met him in San Francisco. “You know what I mean, the bookshelf when you walk into someone’s house, the one where they keep all their favorite books. I walked into his living room and started checking out his shelf and just grilling him, like, ‘That looks cool. What’d you think of it? What’d you think of that?’ ” He left his friend’s place with 10 good books. “I was like, if I could go to all my friends’ living rooms and grill them about what books they like, I would never lack for a good book again. But instead of doing that, why don’t I just build a site where everybody puts their shelves in their profiles?”

 

Read the full article on Vanity Fair.

 

The Amazon/Hachette Battle and Why It’s Great to Be a Self-Published Author

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This post by Miral Sattar originally appeared on PBS Mediashift on 6/3/14.

After a fantastic BEA (Book Expo America), I’ve been digesting the whole Amazon/Hachette battle. I’ve basically come to the conclusion that it’s an incredible time to be a self-published author.

The first thing that surprised me is that so much has been misreported about the Amazon/Hachette battle. Amazon and Hachette are negotiating their contract terms, and what normally should have been behind-the-door talks is turning into an all-out flame war in the media.

 
Myths:

a) Amazon increased publisher prices.

Amazon can’t increase prices. Amazon acts as a retailer of books. The publisher always sets the price of the books. Amazon only changes the amount of the discount similar to the way Walmart, Target or anyone else would.

b) Amazon removed buy buttons from Hachette titles.

No, Amazon didn’t remove any buy buttons. They just removed pre-order buttons from Hachette titles. Amazon doesn’t make pre-order buttons available to everyone and negotiates with each publisher individually. Readers can still buy their books albeit with delays as posted in the Amazon forums.

 

Read the full post on PBS Mediashift.

 

Is the NYT Coverage of Amazon vs. Hachette Really Propaganda?

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide To Publishing on 10/6/14.

By now you’ve seen the NYT Public Editor’s piece criticizing her own newspaper’s coverage of the Amazon/Hachette situation.

Note to David Streitfeld: see what Margaret Sullivan did? Being a competent reporter, she researched the situation and presented both sides of the story. That means quotes from authors representing both sides, and quotes from the very source (you) she was critical of.

She’s an excellent, smart, fair journalist, Mr. Streitfeld. Put your hat in your hand and go thank her. After you have, ask her for some pointers.

As well done as the piece was, Ms. Sullivan did write something that I didn’t agree with.

“A pro-Amazon author (Barry Eisler) charges that the paper is spewing propaganda…“propaganda” is a stretch…”

Is it really a stretch? Let’s dig a little deeper.

According to Wikipedia:

Propaganda is information that is not impartial and used primarily to influence an audience and further an agenda, often by presenting facts selectively (thus possibly lying by omission) to encourage a particular synthesis, or using loaded messages to produce an emotional rather than rational response to the information presented.

Hyperlinked in that definition is “impartial” which leads to a wiki about journalistic objectivity:

Journalistic objectivity can refer to fairness, disinterestedness, factuality, and nonpartisanship, but most often encompasses all of these qualities.

Also linked is “lying by omission”:

Also known as a continuing misrepresentation, a lie by omission occurs when an important fact is left out in order to foster a misconception. Lying by omission includes failures to correct pre-existing misconceptions.

And “loaded messages”:

In rhetoric, loaded language (also known as loaded terms or emotive language) is wording that attempts to influence an audience by using appeal to emotion or stereotypes.

Mr. Streitfeld says his stories have been driven by one value: “newsworthiness”. Back to Wikipedia:

Newsworthiness does not only depend on the topic, but also the presentation of the topic and the selection of information from that topic.

Is Streitfeld presenting his topics well? What information is he selecting about the topic? Does it err to the side of journalistic objectivity?

Let’s go back to May when the Amazon/Hachette story broke and Streitfeld wrote this piece. Looking at the definitions above, do these quotes from Streitfeld’s piece qualify as propaganda?

Streitfeld: Among Amazon’s tactics against Hachette, some of which it has been employing for months, are charging more for its books and suggesting that readers might enjoy instead a book from another author.

Joe sez: Amazon “charging more for its books” actually means Amazon is charging Hachette’s suggested retail price. Amazon suggesting that readers might enjoy a book from another author “instead” is unproven. Amazon advertises other authors’ books on every book page. This isn’t unique to Hachette. Amazon also offers used books for considerably less than the price of the new version, on the very same page. (buy Whiskey Sour for only $0.01!) But where has Amazon said “Buy this instead of this”? The word “instead” is loaded.

 

Click here to read the full, lengthy deconstruction of Streitfeld’s piece with Konrath’s commentary on A Newbie’s Guide To Publishing.

 

Big Publisher Bashing Again With Fictional Facts

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Today we present two opposing viewpoints from industry professionals regarding the Amazon/Hachette dispute. This post by Mike Shatzkin originally appeared on The Shatzkin Files on 9/14/14, and was written in rebuttal to the Clay Shirky piece we are also sharing today (link to the full Shirky’s post included immediately below).

The estimable Clay Shirky has written a lengthy piece called “Amazon, Publishers, and Readers” on medium.com saying, essentially, that an Amazon-dominated world would be an improvement over the Big Five “cartel”-dominated world of publishing we have today. This is an apples to oranges comparison. The Big Five are not nearly as broad a cartel as Amazon — which reaches way beyond the consumer books they publish — is a monopsony. Amazon touches much more of the book business than the Big Five publishers do. To make his case, Shirky recounts some very questionable history and employs some selective interpretation to get from his own impression of the current Hachette-Amazon dispute (about which he says “Amazon’s tactics are awful, the worst possible in fact”) to a completely different conclusion.

My complaint with the facts and logic start at the top: with the two paragraphs Shirky uses to set up his argument and establishes the “holier-than” context for his position. He says:

Back in 2007, when publishers began selling large numbers of books in digital format, they used digital rights management (DRM) to lock their books to a particular piece of hardware, Amazon’s new Kindle. DRM is designed to transfer pricing power from content owners to hardware vendors. The publishers clearly assumed they could hand Amazon consolidated control without ever having to conspire with one another, and that Amazon would reward them by passing cost-savings back as inflated profits. When Amazon instead decided to side with the customer, passing the savings on as reduced price, they panicked, and started looking around for an alternative conspirator.

Starting in 2009, five of the six biggest publishers colluded with Apple to re-inflate ebook prices. The model they worked out netted them less revenue per digital sale, because of Apple’s cut, but ebooks were not their immediate worry. They wanted (and want) to protect first editions; as long as ebook prices remained high, hardback sales could be protected. No one had any trouble seeing the big record companies as unscrupulous rentiers when they tried to keep prices for digital downloads as high as they had been for CDs; the book industry went further, violating anti-trust law as they attempted to protect their more profitable product.

Almost every sentence of this is subtly or blatantly wrong.

1. Publishers did not begin selling large numbers of books in digital format in 2007. Amazon started Kindle in late November 2007. Significant sales of ebooks didn’t start to occur until after Christmas and continued to grow rapidly thereafter.

2. Although an uninformed person would be led to infer from reading this that DRM was somehow created for Amazon, in fact DRM was routinely used for ebooks for their entire existence before Kindle. DRM on Kindle continued current practice; DRM was not created for Kindle or at Kindle’s behest.

 

Click here to read the full post on The Shatzkin Files.

 

Amazon, Publishers and Readers

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Today we present two opposing viewpoints from industry professionals regarding the Amazon/Hachette dispute. This post by Clay Shirky originally appeared on Medium on 9/12/14.

In the current fight between Amazon and the publisher Hachette over the price of ebooks and print-on-demand rights, Amazon’s tactics are awful, the worst possible in fact: They are denying readers access to books, removing pre-order options and slowing delivery of titles published by Hachette. Amazon’s image as a business committed to connecting readers to books is shredded by this sort of hostage-taking. The obvious goal for readers in should be to punish anyone using us as leverage.

This skirmish will end, though, and when it does, we’ll be left with the larger questions of what the landscape of writing and reading will look like in the English-speaking world. On those questions, we should be backing Amazon, not because different principles are at stake, but because the same principle — Whose actions will benefit the reader? — leads to different conclusions. Many of the people rightly enraged at Amazon’s mistreatment of customers don’t understand how their complaint implicates the traditional model of publishing and selling as well.

Some of the strongest criticism of Amazon comes from authors most closely aligned with the prestigious parts of the old system, many of those complaints appearing as reviews of “The Everything Store”, Brad Stone’s recent book on Amazon and Jeff Bezos. Steve Coll, Dean of the Columbia Journalism School, wrote one such, “Citizen Bezos,” in The New York Review of Books:

At least two qualities distinguished Bezos from other pioneers of e-commerce and help to explain his subsequent success. The first was his gargantuan vision. He did not see himself merely chipping away at Barnes & Noble’s share of retail book sales; he saw himself developing one of the greatest retailers in history, on the scale of Sears Roebuck or Walmart. Secondly, Bezos focused relentlessly on customer service — low prices, ease of use on his website, boundless inventory, and reliable shipping. To this day, Amazon is remarkably successful at pleasing customers.

Coll does not intend any of this as a compliment.

He writes about book-making and selling as if there are only two possible modes: Either the current elites remain firmly in charge, or else Amazon will become a soul-crushing monopoly. The apres nous, le deluge!-ness of this should be enough to convince anyone that the publishers are bullshitting, but if your worry is market manipulation, the publishing cartel we have today has has already created decidedly non-hypothetical harms.

 

Click here to read the full post on Medium.

Click here to read Mike Shatzkin’s rebuttal to Shirky’s post, on The Shatzkin Files.

 

What Does Amazon/Hachette Have to Do With Me?

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This post by Barry Eisler originally appeared on his blog on 8/9/14.

In connection with the $100,000 ad some reactionary authors bought to run in tomorrow’s New York Times, Amazon has sent a letter to its self-published authors. It’s a good read, with some interesting historical context, for anyone who values low-priced ebooks and fair royalties for writers. And if you want to share your opinion on those topics with the CEO of “Big Five” publisher Hachette, you can email him — just scroll down the Amazon letter. Here’s what I said:

Hi Michael, even if the Big Five (why would anyone imagine something called the Big Five could be a cartel?) still had the power to control the market — and you don’t — the best you could do through agency and windowing and the like is delay the inevitable mass market transition to digital. Is that really who you want to be? A reactionary, focused on shoring up the next quarter rather than expanding your opportunities for the long term?

I don’t want big publishing to die — I want it to get well. But to get well, you’re going to have to change the lifestyle that’s led to your ongoing decrepitude.

Please, think about the future. Think about your place not just in the Big Five, but in the world. Stop impeding what’s best for readers, writers, and reading. Don’t fight progress. Be progress.

Sincerely yours,
Barry Eisler
www.barryeisler.com

I’ve seen some interesting reactions to the Amazon missive. I responded to some of them over at The Passive Voice, which consistently has some of the best industry coverage I’ve seen (both for Passive Guy’s presence and the insights of the people who comment there). I’ll address those reactions here, as well:

1. Amazon and/or Hachette are trying to get me to do their bidding, drag me into their war, dragoon me, etc.

 

Click here to read the full post on Barry Eisler’s blog.

 

Michael Cader of Publishers Lunch In Conversation With J.A. Konrath

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide to Publishing blog on 8/1/14.

Joe: Yesterday I fisked Mike Shatkin, who openly brags he doesn’t read my blog, and has removed my comments from his blog because he felt them too long.

I also fisked Michael Cader from Publishers Lunch.

Cader, however, showed he doesn’t fear debate, and had no problem sharing his opinion in a forum where many have a contrary point of view. He responded to my points in the comment section, and that took integrity and more than a little bit of guts.

Michael Cader: Hi, Joe. I’m glad we have at least some points of agreement. Some of your other replies are tangential rather than on point.

Joe: Thanks for responding, Michael. While it isn’t unprecedented for people I blog about to respond, it is certainly unusual, and shows both an open mind and a willingness to engage. You have my respect.

Cader: Amazon is very careful with their words, even if not elegant. The post begins, “A key objective is lower e-book prices.” A lot of traditional media have written the post up as if it said “The key objective…” What are the other key objectives, Amazon? Why do your conversations with people in the trade talk about looking for your fare share of the “business efficiencies” produced by a rising ebook market and your investments, while your public words are only about pricing objectives.

Joe: Well, we agree that Amazon is careful with their words. It’s unusual to hear an observation like that leveled as a criticism. Does Cader prefer the Hachette approach, which is to clear English what a chainsaw is to a tree…?

 

Click here to read the full post on A Newbie’s Guide to Publishing.

 

Amazon Speaks: We Want Lower eBook Prices from Hachette

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This post by Nate Hoffelder originally appeared on The Digital Reader on 7/21/14.

Amazon hasn’t said much concerning their ongoing contract dispute with the French media conglomerate Lagardère and its US publishing subsidiary Hachette, and today the retailer broke their silence with what is only their third official statement (not counting the leaked letter).

Like the first two statements, Amazon isn’t saying much. According to a message posted on Amazon’s forums (and copied below), one of the sticking points in the negotiations is the price of ebooks. We of course knew this from the WSJ interview in which Russ Grandinetti said little and avoided defending Amazon, but Amazon expands upon that earlier statement with a call for higher author royalties on ebooks.

The statement below lays out the math Amazon uses to justify their push for lower ebook prices, but it’s worth noting that the statement is somewhat misleading.

Amazon would like you to think that most ebooks can be priced at or below $10, even going so far as to point out that “there will be legitimate reasons for a small number of specialized titles” that will cost more, but what they hope you won’t realize is that they are glossing over whole swathes of nonfiction content, including textbooks, reference manuals, professional books, and works that are much longer and more expensive to create than your average novel.

 

Click here to read the full post on The Digital Reader.

 

Amazon-Hachette: The Sounds of Silence

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This post by William Ockham originally appeared on A Newbie’s Guide to Publishing on 7/13/14.

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

Recent statements from both sides have provided a lot more information about how this dispute got to this point. To avoid turning Joe’s blog into an academic article, I’m not going to footnote all of these events. If you want the source for a particular claim, just ask in the comments. My primary sources are the most recent Amazon-Hachette exchange and Michael J. Sullivan’s account of his interactions with Amazon and Hachette this year. If I have left off any significant events and gotten any of this wrong, please let me know in the comments [section on the original post]. I’m far more interest[ed] in getting this right than being right.

 

Early Jan 2014

Amazon makes the first move, sending an offer to Hachette. Based on Hachette leaks, we know that Amazon is offering a return to wholesale pricing.

7 Feb 2014

Amazon stops discounting Hachette titles.

 

Click here to read the full post on A Newbie’s Guide to Publishing.

 

Amazon Speaks!

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This post by Alex Shephard originally appeared on the Melville House blog on 7/3/14.

Amazon does not like to talk. And Amazon especially does not like to talk to the press—when the company felt it had to address its dispute with Hachette in late-May it avoided the media completely, and instead released an odd, condescending statement on its Kindle forum. In every report about its ongoing negotiations with Hachette you could expect to find one, beautiful sentence: “An Amazon spokesman declined to comment.”

That changed late Tuesday, when an Amazon representative—Russ Grandinetti, Amazon’s senior vice president of Kindle content—did comment, to the Wall Street Journal’s Jeffrey Trachtenberg. The timing was, perhaps, deliberate—Trachtenberg’s piece went up shortly before “Amazon: Business as Usual?” a panel discussion hosted by The New York Public Library began. That panel discussion featured a number of outspoken Amazon critics, including James Patterson, Bob Kohn, and Tim Wu. Amazon was clearly paying attention: it paid to fly self-publishing blogger and pro-Amazon zealot David Vandagriff to New York City to participate. (That Amazon finds Vandagriff, who does little to hide his disgust with “traditional publishing” on his blog, to be an appropriate spokesperson for the company’s aims is interesting, though it’s possible that they merely wanted to counter-balance the other panelists’ anti-Amazon views. Fight fire with fire: the Amazon way.) Once again, Amazon found the media narrative slipping away, and it decided to fight back.

 

Click here to read the full post on the Melville House blog.

 

Big Publishing is the Problem

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This post by Hugh Howey originally appeared on his site on 6/14/14.

A few weeks ago, I speculated that Hachette might be fighting Amazon for the power to price e-books where they saw fit, or what is known as Agency pricing. That speculation was confirmed this week in a slide from Hachette’s presentation to investors [Publetariat Editor’s note: click on image to view an enlarged version in a new tab or window]:

So, no more need to speculate over what this kerfuffle is about. Hachette is strong-arming Amazon and harming its authors because they want to dictate price to a retailer, something not done practically anywhere else in the goods market. It’s something US publishers don’t even do to brick and mortar booksellers. It’s just something they want to be able to do to Amazon.

The biggest problem with Hachette’s strategy is that Hachette knows absolutely nothing about retail pricing. That’s not their job. It’s not their area of expertise. They don’t sell enough product direct to consumers to understand what price will maximize their earnings. Amazon, B&N, Kobo, and Apple have that data, not Hachette.

 

Click here to read the full post on Hugh Howey’s site.

 

Is Amazon Good For Books? and other dumb questions

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This post by Robert Kroese originally appeared on his site on 6/10/14.

I finally got around to reading George Packer’s article in the New Yorker entitled “Cheap Words: Amazon is good for customers. But is it good for books?” yesterday. Spoiler alert, in case you haven’t read the article: Packer doesn’t answer the question. In fact, he doesn’t even really address the question. Most of the article is taken up with head-shaking reminiscences of Amazon’s ruthless business practices, its treatment of books as “widgets” rather than the lovingly birthed children of the tortured souls of artists, and a few anecdotes about poor working conditions in warehouses (another spoiler: warehouses, by and large, are not fun places to work). Finally, in the concluding paragraphs, Packer gets around to the question at hand:

Several editors, agents, and authors told me that the money for serious fiction and nonfiction has eroded dramatically in recent years…. These are the kinds of book that particularly benefit from the attention of editors and marketers, and that attract gifted people to publishing, despite the pitiful salaries. Without sufficient advances, many writers will not be able to undertake long, difficult, risky projects.When consumers are overwhelmed with choices, some experts argue, they all tend to buy the same well-known thing….

These trends point toward what the literary agent called “the rich getting richer, the poor getting poorer.” A few brand names at the top, a mass of unwashed titles down below, the middle hollowed out: the book business in the age of Amazon mirrors the widening inequality of the broader economy….

 

Click here to read the full post on Robert Kroese’s site.

 

Amazon vs Hachette and the Erosion of Author Solidarity

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This post by Mary W. Walters originally appeared on her The Militant Writer site on 6/7/14.

Writers need to remember that both sides are making more money from our talent than we ever can.

Like many other writers, I am caught in a sticky predicament when it comes to the battle between Amazon and the publisher Hachette, in that supporting what is growing into a cause célèbre for many traditionally published authors means diminishing our own work and reducing our (mostly paltry) incomes.

For those who have missed this story, Amazon has begun to delay the delivery of books by Hachette authors significantly, and to create impediments on searches for Hachette books on the Amazon site: apparently due to a dispute between the two companies over ebook pricing. (See the LA Times for details.) No less a celebrity than Stephen Colbert is now urging all of us to boycott Amazon in support of Hachette authors, of which he is one. The New York Times is outraged. So are many noted writers (Martin Gladwell and James Patterson are two, both also published by Hachette) and several writers’ organizations.

Those of us who are caught in the middle of this firestorm are primarily established writers who have chosen to go the self-published route for some or all of our new or out-of-print titles, and to use Amazon as our publishing partner. Typically, we ourselves have had books published with traditional presses in the past, and as a result we have strong connections (e.g., through membership in writers’ organizations) and even long-term friendships with other authors who are still published only by established presses. These presses include not only Hachette but all publishers who could receive similar treatment from Amazon in future, which is most of them. Solidarity is at stake here, and in a pre-self-publishing world, we would have easily and strongly stood together. Now, over this issue and several others related to it, such strength in unity is impossible.

 

Click here to read the full post on The Militant Writer.