Hachette/Amazon

Thesetwo companies are really going nuclear just now. Amazon wrote a letter to all its Kindle published authors, asking them to write to Hachette for being nasty, and Hachette’s boss has written to all of those who have written to him (be interesting to know how many) with a fairly straightforward response.

So who is right?
Amazon is saying that they want all books to have their prices reduced. Who will that help? Perhaps it’ll do something for publishers in terms of additional sales, but I rather doubt it. The additional sales will be more than outweighed by the reduced amount paid.
I have to say that from an author’s perspective, I do not understand why Amazon should deserve such a large cut of my money. They are trying to impose retail prices, which is fine – but they are fully entitled to charge what they want already. If they want to discount further for the benefit of their customers, I am perfectly happy for them to do so. But not if that means reducing my income still further.
The basic problem is, authors have already seen incomes slashed by 29% in the last seven years, partly as a result of Amazon’s aggressive policies towards suppliers.
Amazon are keen to say that the publishers and authors should share 35% each, and let Amazon take 30%. They are most kind. The reason for this is to drive a wedge between publishers and authors. Actually, it would seem to make more sense to me to see 70% to authors and 15% each to publisher and retailer. Or maybe 90% to authors, or … But that would be greedy.
However, there is a point to all this: who does all the work to get a book to the reader?
The author does rather a lot. The story is the author’s, the characters, the plots, the excitement, the sadness, the humour – that is all the author’s.
However, as you will tell if you spend much time glancing at the free books on ebook, authors on their own often don’t always come up with particularly good ideas. Editors are not a luxury, they are essential to the publication of good books of any sort. And once the editor’s had her say, there is the copy editor, and the proofer. They all have crucial jobs that help make your reading experience more pleasant.
And then there are the artists, and the designers, the folks who make sense of my hand-sketched maps, the poor benighted devils who try to take my lines and turn them into decent PR material … and they need the support services of computer experts, the electricity that feeds the computers and the lighting systems, the buildings that house the photo-copiers, and there are the receptionists and telephone operators, even the security chaps on the front desk.
Publishers have all these expenses. And they are valid. And they also produce books on paper which may not make much money. And sometimes some publishers will still take on new authors for no other reason than that the editor sees something in that book, and perhaps the second book, and sees a developing skill that is worth nurturing, some basic talent that just needs a little money and practice for a couple of years, and then the author might turn into another Ian Rankin. Good publishers take risks.
Authors take massive risks.
We have no say in how much our books sell for; we have no say in discount structures; we have no control over our income at all.
Retailers have staff and buildings too.
Perhaps it is time for publishers and retailer (Amazon is effectively a monopoly now, after all) to sit down and argue terms and conditions together.

And authors should be present to make sure our interests are not thrown away.

Lots of lovely books!

Lots of lovely books!

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Comments
19 Responses to “Hachette/Amazon”
  1. Jack Eason says:

    In all honesty Michael, I can’t see either Amazon or Hatchette siding with authors, can you? They’re in the business of making money after all. No publisher, no matter how big, or how small can say with their hand on their heart that they give a fig for the author. ;)

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  2. Jack Eason says:

    Reblogged this on Have We Had Help? and commented:
    More on how publishers shaft we writers – big time!!!

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  3. geraldine says:

    Like the idea of 90% going to authors, Michael! But it’s true that most authors have always been bottom of the pile and treated poorly. Perhaps we ought to Unionise and wield a bit of muscle as script writers do in Hollywood. We need an entity that really looks after authors’ interests, not like the Guild that seems to do the opposite most of the time and is more off a mouthpiece for publishers and big-time writers like Patterson and Turow.

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    • I think the Society of Authors is a wonderful representative group for writers, but a new union with more clout like the US group, as you say, would be rather better. Yes! Let’s together!

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  4. geraldine says:

    Reblogged this on geraldineevansbooks and commented:
    Authors! To the barricades! Surely, together, we can come up with a form of Union to represent us and our interests? On our own, we have no voice, but as a group just think of the strength and confidence it would give us all.

    If you’re tired of getting screwed, tired of desperately unfair contracts all in the publishers’ favour, maybe now is the time to do something about it.

    With all the Hachette/Amazon hullabaloo, and all the astonishing changes in the way you can publish a book, it sounds the ideal time to organise an Authors’ Union and slip it under the wire as the official authorial voice before the publishing world realises it exists.

    What do you think?

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  5. geraldine says:

    Reblogged on geraldineevansbooks.com.

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  6. CJ says:

    Okay, I just want to point out, yet again, that while both Amazon and Hachette are giant multinational companies who are in business for themselves, they are not in any way equivalent.

    Hachette was convicted of collusion to screw readers out of more money, has a history of shoving authors into restrictive, shitty, life-of-copyright contracts, and doesn’t know the first thing about selling to readers instead of bookstores. They give authors 15% of the price and an advance that keeps going down.

    Amazon built the ebook market, started an indie publishing revolution, and put a market of millions within reach of the average author for the first time in history. And they give their authors 70%. AND they’ve thrown millions at innovating in the market. AND they’ve got years of sales data to back up their statements on the optimum price point.

    Basically, if you’re siding with Hachette on this, you’re displaying a colossal lack of business sense. You’re siding with a company that doesn’t deserve the benefit of the doubt. Unless something radically changes in the next decade, they don’t have a future.

    Meanwhile, the indie authors self-publishing on Amazon are sitting over on the sidelines, eating popcorn, and giving absolutely zero fucks about any of this.

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    • Hi, CJ, and thanks for the comments, but I’m afraid I disagree.
      First, your percentages for Hachette are wrong, as is your comment about their advances decreasing. That may be true in cases where sales are diminishing (which is largely caused by Amazon’s monopolistic position), but if an author’s sales are increasing, so will his/her advances. Amazon do pay 70% to authors on Kindle, yes, but that’s because they are paying the publishing and writing fee.
      You say, if I am siding with Hachette etc. Well, first, supporting a monopoly to take over all publishing, retail and distribution, as Amazon clearly intends, displays an astonishing lack of business, social and cultural sense. Monopolies are not good for anyone. Once they own the market, they can enforce their own practices and their own censorship, which is not good. Yes, they may be cheap now. Monopolies have a habit of pushing prices up for their own benefit once they own their market.
      However, I am not, if you read the post, arguing that either side is right. The main thing is, with this ludicrous dispute, authors (and readers) are the ones suffering. Amazon is using its monopolistic retail position to blackmail Hachette by penalising the authors. It’s causing massive problems for a very poorly paid profession.As I said, the two should sit round a table and negotiate and stop strong-arm tactics.

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      • CJ says:

        Okay, you just wrote a post that basically shits all over Amazon and barely mentions Hachette at all. What else does that mean other than you coming down on Hachette’s side?

        So let’s be clear about this – I am not wrong about the percentages. Damn near every author I know has said that the average advance has been dropping like a rock for years. Royalties have been getting worse for years too – or did you miss that whole fiasco where Harlequin screwed their authors out of their royalties through subsidiary licensing? Have you missed all the stories about the trad publishers’ absolute incompetence when it comes to accurate royalty statements?

        (Bear in mind that Amazon pays once a month and gives daily sales figures through KDP.)

        So look – I honestly don’t know where you’re getting this monopoly crap from. Amazon are not a monopoly. They could have their collective ass kicked by Google or Kobo or any other online retailer the instant they raise prices or worsen their customer experience – and Bezos knows this, for gods sake. He’s constantly talking about customer service and Amazon throws a hilarious amount of money at innovation. If they’re the dominant player, it’s because they fight for it every day. And again, to date, all they’ve done with their dominant position is drop prices and help a lot of authors earn money from their books that they wouldn’t otherwise have seen at all.

        It’s no coincidence that about 900 authors came out in favor of Hachette, and 8000 came out in favor of Amazon. Because, newsflash, the big trad publishers had control of the book market before Amazon launched KDP and started the indie revolution. So if you want to talk about monopolies, maybe point a few fingers at Hachette and the other publishers who actually did engage in monopolistic practices for years, and who tried to illegally price fix books.

        On top of that, Amazon even offered to pay Hachette’s authors so that they wouldn’t be affected by the dispute, and Hachette refused.

        So what I’m saying here is that Hachette haven’t earned the benefit of the doubt. They haven’t negotiated in good faith and everything about their actions suggests that they want to keep their authors in the firing line because it gives them ammo against Amazon. I’m not going to say that Amazon is all sunshine and bunnies – it’s not – but the fact is that it’s been a pretty good business partner to authors and readers, and Hachette has been a bad one. You don’t go into business with a partner who has a history of shitty decisions, and you sure as hell don’t defend them when they make more shitty decisions.

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      • CJ, sorry if I’ve hit a raw nerve here. This is a subject that is really hot for all authors, I know. However, I’m not supporting one side more than another, just trying to explain my own views on the market generally.

        I don’t think you understand the basics of advances. Yes, royalties and incomes have been falling, because Amazon has demanded ever larger discounts from suppliers. They routinely demand 80% discounts. The publishers cannot pay ever larger sums to authors when they are constantly seeing their own profits reduced. Authors have therefore been forced to agree to “net receipts” contracts, and thus, when Amazon demands, for example, 90% discount because they have a new Kindle launch, the authors see their income reduced accordingly. The argument is, of course, that increased sales will mean increased income for authors.

        However, advances are largely irrelevant. They help pros like me who have no other income, but they are only a reflection of how a publisher thinks a book will sell. Publishers cannot pay fabulous half million dollar advances to authors whose books will only bring in five thousand. Thus advances are only an advance against future royalties; in effect they’re an interest free loan that will be paid back by royalties. If Amazon demands greater discounts, the royalties will reduce. And again, authors will suffer.

        You suggest that, in terms of monopolies, I should ‘point a few fingers at Hachette and the other publishers’. At no time has any of them achieved (or probably wanted) even a near-monopoly. However Amazon now has 79% of the UK ebook market, for example. Their share of paper books is also very high for the simple reason that they have forced out of business tens of thousands of bookshops that could not compete with their aggressive sales tactics (source, the Bookseller). When a business owns nearly 80% of a market, that is de facto a monopoly.

        Do I think Hachette and other publishers are innocent? No. However, your very determined defence of Amazon in your earlier comment rather forced me to take the opposing view in an attempt to explain why professional authors, by which I mean those who, like me, depend on writing for all their income, are asking Amazon AND Hachette to sit round a table and discuss things. This is not a case of one side being entirely right, but it is definitely the case that authors are the victims in this ludicrous fight. If Amazon was negotiating in good faith, they would stop the blackmailing tactics of removing the buy button, delaying sales, and saying that stock was run out for Hachette authors, thereby depriving authors of their livelihood as well as readers their opportunity of getting their hands on the books they want to read. When I was in business I had a simple policy: I would not deal with a firm blackmailing me into larger and larger discounts.

        One point I would make: I am a keen supporter of all writers and writing. I was once an unpublished author, and I know what the stresses and strains are of trying to get into print. I was lucky to have made it years ago, before epublishing and Amazon, when life was much easier, and I made a very decent percentage on every sale of 7.5% of the sale price. I also have helped 11 authors to get published and spend a lot of time helping others with their writing. I’m not the enemy.

        I know that many indie authors view the authors’ letter to Hachette and Amazon was more or less a comment against them (and many think it’s hilarious that ‘published’ authors are being hit so hard). However, you don’t strengthen your case by using insulting language. I’m very happy to continue a discussion, but not with someone who’s going to use language that other readers may find offensive, so I’d be grateful for fewer scatological references.

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      • CJ says:

        Oh em gee, I said a bad word. Someone call the Pope. /sarcasm

        I don’t think you’re the enemy, man. I think you’ve been drinking way too much of the trad publisher Kool-aid, because you’re making Amazon out to be the bad guy and giving Hachette a free pass. Like, it’s Amazon who’s ‘using strongarm tactics’, but you don’t say a thing about Hachette refusing to negotiate for months, or intentionally keeping their authors in the firing line, or getting all their buddies in the big media outlets to write hit pieces.

        You just seem blind to the fact that Amazon has done incredible things for authors, and the trad publishers have a history of doing horrible things to them. Amazon spent millions building the ebook market and then gave every author with a computer direct access to it. Hachette and the other trad publishers engaged in illegal collusion, for gods sake, that hurt consumers and kept the price of ebooks unreasonably high – and I’m not even going to talk about their contracts, which is a whole other rant all on its own.

        I keep saying this, and I’m going to say it again: these are two large companies, yes, but history alone shows me that Amazon has been a consistently better business partner to authors than Hachette, and it deserves the benefit of the doubt far more.

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      • It sounds rather like you’ve been swallowing an awful lot of Amazon Kool-aid! Whereas I have made it quite clear that I don’t argue for one side or the other, your one-sided argument forces me to point out the weaknesses in your comments.
        I do have to say that I have no brief for either side. I also don’t have any insider information about Hachette or Amazon. I don’t have the faintest idea what has been offered, rejected or accepted by either party. Neither, I suspect, do you. However, the basic fact that Amazon is preventing authors from selling their books in order to strong-arm a supplier is a clear indication of their business practices. They are now trying to use their thousands of smaller suppliers to convince the media that they are acting in the public’s interest. It’s what businesses do.
        Yes publishers in the past may also have hurt authors. Not to this extent, though.
        However, Amazon’s monopolistic policies and aspirations have done a vast amount of damage to publishing and the availability of books generally. As a published author, I can see one major impact of Amazon, which is that author incomes have been slashed due to their aggressive policies. And of course there is the “one size fits all” contracts for all suppliers. As an author, if I want to sell my books, I have to agree to a series of Amazon demands. They have forced many to accept their terms, such as allowing free loans under their “Prime” deals, in exchange for a share of a loans pot. Not a fixed payment depending on each sale, such as a publisher gives, but a share of a pot. At the same time, Amazon has not got a terribly good reputation as an employer.
        Yes, publishers have a fair amount to answer for. You won’t find me defending them generally. However, your views on Amazon are so widely at variance with the reality on the ground – and especially the views of all authors I know – that you sound much more like a company man than an independent.
        Again, it is clear that publishers and Amazon are causing major hardship for authors with this silly dispute. The dispute should be stopped. I do not support either side particularly, unlike you.
        This topic is now closed, I’m afraid. I have too much to do with my next novel, my 35th medieval. In addition I have another ebook to write, several paintings to work on, and a bunch of books to review.
        Happy reading!

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  7. Jerome Dive says:

    Not that I think they should get 30% for that, but there are a few things Amazon do quite well (which is why until a few months ago I was a customer):
    1 Their website is rather well done, now that I buy book from other websites (difficult to find French or English book in German speaking Switzerland) I often search for a book on amazon.fr (or co.uk) and then use the isbn to get from another site.
    2 They have very nearly all books, including rather rare academic books; and they leverage this by offering second hand books (very useful for out of print books, even better than ebay in my experience for books in romanesque art in both French and English).
    3 They are quite good at delivery. And they do it ‘for free’ (probably by using the money they should pay back to authors).

    I wonder how much investment it would take to create a comparable website, probably quite a lot if nobody else has done it yet…

    To some extend, other strengths may be vanishing:
    Products from Hachette and Disney in the US, another publisher in Germany, are not on Amazon any more. This probably shows they think they are strong enough people will buy other books or DVD rather than go to another retailer, which is a bit scary, but if they keep not selling more and more products customers may go elsewhere.
    And delivery costs are not the most important thing for ebooks.
    There is still hope Amazon, or any single organisation, will not have a controlling stake in the books (paper or electronic) market.

    Finally, I am not an author, but it seems pretty strange there is no professional body or union to defend their interest.

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    • We do have two groups in the UK, the Society of Authors, and the Writer’s Guild, but groups funded by authors, whose incomes are falling year on year, are themselves not in a position to fight a multinational like Amazon. I’ve no idea what the solution is, but I wish Amazon and the publishers would negotiate rather than shooting at each other and hitting authors!

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  8. Lindsey Russell says:

    Found this blog link that ties in with what is being discussed

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  9. Jerome Dive says:

    Only indirectly related to the issues discussed here, and probably already know by people professionally involved in writing and publishing, but I found this short article about hardbacks versus paperbacks and ebooks: http://www.economist.com/blogs/economist-explains/2014/10/economist-explains-15.

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