Hachette

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.

 

David Streitfeld is Dangerous and Disingenuous

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This post by Hugh Howey originally appeared on his site on 9/15/14.

David Streitfeld of the New York Times has now cemented himself as the blabbering mouthpiece for the New York publishing cartel, and while he is making a fool of himself for those in the know, he is a dangerous man for the impression he makes on his unsuspecting readers.

(I should point out here that I’m a 7-day-a-week home delivery subscriber to the New York Times. I start every day by reading the physical paper. I love it. But they do make occasional hiring mistakes.)

A dishonest man with access to a pulpit is like a poisoner with access to a well. David Streitfeld is a dishonest man. He is a reporter with an agenda. A good case in point is this head-scratcher: Just one summer ago, David made reference to Orwell’s well-known disdain for cheap paperbacks to draw a comparison to Amazon’s fight for lower ebook prices. A year later, the same David Streitfeld claimed that Orwell was a fan of cheap paperbacks. What changed?

What changed is that Amazon used the same Orwellian quote in proper context, just as David did a year ago, but we all know that Amazon simply can’t be right about anything. And so enterprising Amazon-bashers reframed a partial quote from Orwell in an attempt to have the deceased man stand for the opposite of his opinion, in an exercise as disgusting as it was Orwellianly ironic.

 

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

 

In Defense of Amazon

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This post by Neal Pollack originally appeared on Slate on 9/2/14.

I’m a writer, and my experience with this supposedly evil corporate behemoth has been fantastic.

Last August, Amazon flew about 80 writers on its Thomas & Mercer mystery and thriller imprint—including me—to Seattle for a conference. They put us up at the Westin downtown, a nice hotel by any standard, and spent the weekend feeding us well and serving us top-shelf booze at an increasingly fabulous series of parties. There were tourist outings, the usual conference mix of panels and workshops, and a non-stressful visit to the Amazon Death Star. Also, they gave us a free Kindle Paperwhite, a nice touch.

With a few exceptions, none of the writers at the conference were particularly famous; some had only published one or two books, all with Amazon. The Seattle trip wasn’t normal treatment for them, or for anyone. I’ve published books with independents and with big corporate imprints, and I’ve published books on my own. Each of these experiences was positive in its own way. But never before had I been treated quite like this. It felt like I’d entered a glorious new age. Amazon had given me a free sneak preview of what book culture would be like from now on.

As usual, I was naive.

 

Click here to read the full post on Slate.

 

Authors Behaving Badly and Authors Who Aren't

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide To Publishing blog on 7/3/14.

So a bunch of legacy authors–many of them smart and who should know better–just signed a letter accusing Amazon of things that simply make no sense.

Some of the usual suspects are at the forefront. James Patterson, who continues to show he has no clue about how his own industry works. Scott Turow, whose tenure as president of the Authors Guild amounted to being a shill for Big Publishing. Douglas Preston, who once supported windowing ebook titles and keeping prices high.

Preston recently said:

“If I were Jeff Bezos, the one thing I would fear most is if authors organized themselves and took broad, concerted, sustained, and dignified public action.”

Konrath replies:

“If I were Jeff Bezos, I would know that legacy authors have no power, because they signed away their rights to their publishers. Patterson, Turow, and Preston couldn’t remove their books from Amazon even if they wanted to. But, strangely, I don’t hear any of them demanding it, or even mentioning it.”

Naturally, I’m going to fisk this letter. Then I’m going to link to a different sort of letter for authors to sign. Hugh Howey and I, along with Barry Eisler and others, have been fiddling with this letter for the last 24 hours, and it explains to readers what’s really happening with the Amazon/Hachette dispute.

 

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

 

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.

 

The War on Amazon is Big Publishing's 1% Moment. What About Other Writers?

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This post by Barry Eisler originally appeared on The Guardian on 6/4/14.

More people are buying more books than ever, and more people are making a living by writing them. Why do millionaire authors want to destroy the one company that’s made this all possible?

As an author of ten novels – legacy-published, self-published, and Amazon-published – I’m bewildered by the anti-Amazon animus among various establishment writers. James Patterson pays for full-page ads in the New York Times and Publishers Weekly, demanding that the US government intervene and do something (it’s never clear what) about Amazon. Richard Russo tries to frighten authors over Amazon’s “scorched-earth capitalism”. Scott Turow conjures images of the “nightmarish” future that Amazon, “the Darth Vader of the literary world”, has in store for us all. And “Authors Guild” president Roxana Robinson says Amazon is like “Tony Soprano” and “thuggish”.

These are strange things to say about a company that sells more books than anyone. That singlehandedly created a market for digital books, now the greatest source of the legacy publishing industry’s profitability (though of course legacy publishers are sharing little of that newfound wealth with their authors). That built the world’s first viable mass-market self-publishing platform, a platform that has enabled thousands of new authors to make a living from their writing for the first time in their lives. And that pays self-published authors something like five times as much in digital royalties as legacy publishers do.

I can think of at least several explanations for the strange phenomenon of authors – and an entity calling itself the calling itself the “Authors Guild” – railing against a company that sells so many books, that treats authors so well, and that has created so many new opportunities for writers. Basically: equating the various functions of publishing generally with the legacy industry specifically; blaming Jeff Bezos for technology; and experiencing judgment clouded by self-interest.

 

Click here to read the full post on The Guardian.

 

Announcement Hachette/Amazon Business Interruption

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This post from the Amazon Books Team was posted on the Amazon site on 5/27/14.

We are currently buying less (print) inventory and “safety stock” on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future. Instead, customers can order new titles when their publication date arrives. For titles with no stock on hand, customers can still place an order at which time we order the inventory from Hachette — availability on those titles is dependent on how long it takes Hachette to fill the orders we place. Once the inventory arrives, we ship it to the customer promptly. These changes are related to the contract and terms between Hachette and Amazon.

At Amazon, we do business with more than 70,000 suppliers, including thousands of publishers. One of our important suppliers is Hachette, which is part of a $10 billion media conglomerate. Unfortunately, despite much work from both sides, we have been unable to reach mutually-acceptable agreement on terms. Hachette has operated in good faith and we admire the company and its executives. Nevertheless, the two companies have so far failed to find a solution. Even more unfortunate, though we remain hopeful and are working hard to come to a resolution as soon as possible, we are not optimistic that this will be resolved soon.

Negotiating with suppliers for equitable terms and making stocking and assortment decisions based on those terms is one of a bookseller’s, or any retailer’s, most important jobs. Suppliers get to decide the terms under which they are willing to sell to a retailer. It’s reciprocally the right of a retailer to determine whether the terms on offer are acceptable and to stock items accordingly. A retailer can feature a supplier’s items in its advertising and promotional circulars, “stack it high” in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all, and bookstores and other retailers do these every day. When we negotiate with suppliers, we are doing so on behalf of customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term.

A word about proportion: this business interruption affects a small percentage of Amazon’s demand-weighted units. If you order 1,000 items from Amazon, 989 will be unaffected by this interruption. If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors.

We also take seriously the impact it has when, however infrequently, such a business interruption affects authors. We’ve offered to Hachette to fund 50% of an author pool – to be allocated by Hachette – to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%. We did this with the publisher Macmillan some years ago. We hope Hachette takes us up on it.

This topic has generated a variety of coverage, presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product. Some of the coverage has expressed a relatively narrow point of view. Here is one post that offers a wider perspective.

http://www.thecockeyedpessimist.blogspot.com/2014/05/whos-afraid-of-amazoncom.html

Thank you.
 

Amazon vs. Hachette: What It’s About And Why I’m Rooting For Amazon

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This post by Publetariat founder and Editor in Chief April L. Hamilton originally appeared on her Digital Media Mom site on 5/24/14.

As you may have heard, or read, or discovered while browsing Kindle books on the Amazon site, Amazon is currently in the middle of a battle with “Big 5″ publisher Hachette. The beef is over reseller wholesale contract terms (the publisher’s ‘cut’ on every ebook of theirs sold by Amazon), and Amazon has been using some strongarm tactics to remind Hachette that Amazon doesn’t HAVE to sell Hachette books at all if the parties can’t come to an agreement.

 

First, a little background is needed.

Back when the Kindle was new and ebooks were just starting to become a thing, say 2008 or so, Amazon established wholesale terms with publishers on ebooks based on the “fixed price” (usually known as a “suggested retail price” in other industries, for other products) which was set by the publishers. Amazon could discount the actual sales price of ebooks to whatever they wanted, or even offer them for free, so long as they paid the publisher the wholesale rate that was based on the publisher’s fixed price.

For example, if the publisher’s fixed price was $15 (seriously, that’s the average of the fixed prices the Big 5 publishers were setting; on some ebooks they wanted to go as high as $18) and the publisher’s wholesale cut was 40%, Amazon would have to pay the publisher $5.60 for every copy sold or given away on Amazon. Whether the ebook ultimately sold for $10, $6, or was given away for free, Amazon owed the publisher $5.60 for every copy distributed to Amazon customers. As a result, Amazon was (and still is) actually LOSING money on many ebook sales, but they were willing to take the hit to establish their Kindle line as dominant among ereaders.

 

A couple years down the road, publishers started to get nervous.

In 2010 publishers decided they didn’t want Amazon to have the right to set its own prices on their ebooks anymore, even though Amazon’s retail pricing didn’t affect their wholesale cut AT ALL. They feared that if Amazon were allowed to establish $9.99 in the minds of consumers as a standard price point for frontlist ebooks (new release ebooks the publisher expects to sell well), they would never succeed in rolling out their own, much higher fixed prices. And they were probably right about that, but only because the fixed prices they had in mind for frontlist ebooks were ridiculously high to begin with.

 

Click here to read the full post on Digital Media Mom.