Hugh Howey

Bestselling author of Wool and other books. Currently sailing around the world.

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A Nigerian Scammer’s Dream

A comment on my previous post bears a detailed response. Paris points out that we should be wary of what Amazon does to us in the future. I see this sentiment everywhere, even among Amazon supporters, but especially from their detractors and their competition. The warnings swirled all around BEA.

Paris: I don’t care about the Big 5, whatever position they’re in they’ve brought it on themselves, but we shouldn’t be ignorant about what could be coming or we’ll find ourselves just as blindsided.

I don’t think I’m ignorant about what could be coming. I have just decided to worry about today instead of operate in fear for some tomorrow. I own my rights. I’ll pull my books down when it makes sense to do so. Until then, why let some hypothetical guide my decisions?

Furthermore, why would I punish Amazon’s generosity and service with doubt, distrust, and paranoia? That’s not how I live my life. You are good to me, I love you back. I love you fully. You destroy that trust in a way I cannot forgive, and I don’t even hate you. I am just disappointed, and I go somewhere else.

I’m not saying others should live their lives like this, but it’s how I operate. Is Amazon more likely to screw us in the future if we run around, flapping our arms, saying they are a lurking and greedy evil, and hating them for what they have not yet done? Or are they more likely to screw us in the future if we partner with them, appreciate them, and sing our thanks?

I’d rather live in a world where I do the latter and am eventually disappointed than the former world where I meet generosity with wariness and have my fears confirmed. Call me naive. I call myself happy.

49 replies to “A Nigerian Scammer’s Dream”

“I have just decided to worry about today instead of operate in fear for some tomorrow.”

Is that not what the Big 5 did? They ignored the future, lived in their ideal present, and are getting screwed because of it.

They lived in the present, and when the world changed, they tried to live in the past. That’s different.

We should be aware of potential futures, but it’s hard to live in them. I think that’s what some people do. They conjure nightmares and react to them as if they’re real.

By Post Author

I would take it one step further. The big five was in the process of destroying the traditional book market for several decades until the internet and Amazon came along. They were doing this by buying up smaller publishers and then burying them at the bottom of corporate flow charts, by favoring large retail chains over independent bookstores, buy raising book prices even as shipping and printing expenses went down, by ignoring and marginalizing genre books and by generally treating authors badly. Readership was spiraling downward and truly creative people usually looked elsewhere rather than writing fiction because low advances, unreasonable contracts, and shady accounting made it a lousy way to try to make a living.

The big five are not fighting for a return to the “good old days” of traditional publishing, but to be able to continue recent bad practices that were on their way to ruining traditional publishing by making it more about moving cereal boxes than developing engaged readers and talented writers.

Hugh, I’m not saying don’t use Amazon. Definitely do, but authors should spread their works as wide as they can. They should sell direct and always be looking for new, innovative ways to get their works into the hands of readers.

I know you do this, and you’re always looking for interesting outlets to promote your works and try new things with them. Your post the other day about Booktrack is a great example.

But I don’t think we should hold Amazon up as some our indie publishing deity, a corporation that can do no wrong by us, because even if they change their terms, they’ll still be better than traditional publishing. Should that be our measure of what’s good, if it’s better than what traditional publishing will offer us? I don’t think so, but it’s something I see so many indie authors saying whenever the idea of Amazon lowering royalties or making other negative changes is brought up.

Whenever I hear that argument, I think of politics. If one party does something bad, when the other party does it they simply point to how the first party already did it, so they’re justified in doing it, too. Shouldn’t we expect more? Should companies, politicians, or whoever else get away with doing something bad just because another group or person has done it before? I don’t think so.

We should hold Amazon to a high standard, but we shouldn’t expect that just because we do they won’t make negative changes, and we shouldn’t shrug our shoulders because the changes they make are still better than what’s on offer by traditional publishing.

Sure, tar me as a scaremonger, someone who doesn’t understand business, whatever you all want to call me, but in the end it’s simply because I don’t trust the monopolization of our economies, and because I think people deserve better than what they’re being offered, in publishing and in other aspects of life.

Not trying to tar you, Paris. I have a lot of respect for you and enjoy your comments. That’s why I thought it was worthy of replying to. Disagreement makes for much more enlightening conversation.

My reply to you grew into something I have been meaning to blog about. If you want me to take it down, let me know. No disrespect meant.

By Post Author

Not at all, Hugh. Tar is probably a bit strong of a word for what I was trying to convey, and it was probably more directed a commenter on your last post than at you.

This is an important conversation to have, and this post will only help us to engage more people in it.

Well said, Hugh. It is easy to create hypothetical contexts for the future without linking them to some logic. It is easy to ask the wrong questions. What incentive Amazon has to screw all the self-publishing authors?

And the big 5 did not really ignore the future. They had just created too many artificial barriers in the publishing industry and those barriers lost their significance in the face of technological innovation. What you see now are players wrestling in the publishing world, trying to stay afloat as the tide turns. It’s a transitioning phase and the game isn’t over yet. Naturally, some will exit the market when it becomes no longer feasible for them to stay in the market. Others will enter the market (like more self-publishing authors). And those who want to stay afloat know very well that they cannot remain afloat for long by just snatching market shares from each other. They have to find ways to increase the size of the pie. They have to innovate and come up with new models of publishing. At a time when the entire publishing industry collectively is growing, innovation is the key.

Agreed. If you have the freedom to pivot quickly, the problems of the future require less worrying over. The Big 5 are like oil tankers. I’m a jetski. I could wake up tomorrow, find new terms and conditions have been foisted on me, and spend the day redeploying. You can’t compare the two. This has to be the greatest benefit to self-publishing: Freedom. Not just creative freedom but business freedom.

By Post Author

“If you have the freedom to pivot quickly, the problems of the future require less worrying over.”

I do agree with you to a certain degree, but I guess my whole premise focuses on the idea of dominant market share. In my mind, Amazon will only make negative changes when they reach a huge market share, what number that would be I’m not even sure, but when they reach that level we can pivot as much as we want and we won’t get very far with it.

My fear isn’t so much of Amazon, but of having a monopoly or quasi-monopoly in charge of distribution, so as long as we ensure the market stays rather level, with at least a few healthy competitors, we’ll be fine. I find it troubling to see Kobo retreating on the US, Barnes & Noble faltering, Google continuing to be a rounding error, and Apple the only real competition, but they aren’t doing much to improve their platform (maybe they’re taking their time because of the legal issues they’ve had). As a result, I find it troubling when people only put their books on Amazon, or only promote the Amazon purchasing link, because they increases the push toward monopoly.

We need to be agile, we need to make our books available in as many places as possible, and we need to make sure people know they have many options to purchase, not just one.

While the possibility of “Amazon the Monopoly in Distribution” screwing all self-publishing authors is always there, the likelihood (probability) of that happening is not just slim, it is zero. That’s because there is no reasonable economic explanation suggesting that Amazon will kill the very tools that gave it that market power. Everything that Amazon has been doing is only bridging gap between readers and writers, and at the same time exploring more avenues for publishing (like Kindle Worlds). This is not what a monopolist does. But this is exactly what an entrepreneur, an engine of growth does.

And as far as book publishing goes, remember Amazon itself is not a publisher. Amazon does not make the decision to publish. Previously the decision makers were traditional publishers. But now that game has changed. For new writers can choose to keep that decision making power to themselves or allow someone else to make their decisions as was done before (and get paid for losing that freedom to decide).

And as far as publishing solely from one platform or another is concerned, I think that’s just an experimental phase for a new writer. Let self-publishing writers experiment where to put their eggs (whether in one basket or several baskets) and see what works best for them. They’re figure it out sooner or later.

Amazon had a dominant Market share four years ago.

Now, depending on which numbers you use, Amazon has about 60% of the market, because of other entrants like Kobo, Smashwords, Apple and the like. And that share is falling, not by a huge amount, but falling. I suspect they’ll end up with 50-60% of the market, but other entrants could affect that. By comparison, RHP is already 50% of the Traditional publishing market, but they aren’t some evil corporate entity…

Now, I admit I only took a few econ classes in college,, but I don’t recall an economic theory that says “When Market Share is falling, increase prices/decrease payments to gain more customers and keep the ones you have.”

I’ll admit, what happened with ACX left a bad taste. Amazon failed to give enough notice.

But to be honest, when the trad pub authors throwing out “ACX!!!” as an example of what Amazon might do, I am of 2 emotions. The first is a certain wariness. Yes, amazon could do that, so I plan accordingly. I am not relying on 70% staying 70%.

The second feeling is Mirth. After all, traditional authors, with their middling advances, low royalty rates inhibited production schedules, lack of creative control, lack of IP control, and worst of all, Joint Accounting (which I swear was invented by a movie Industry accountant who switched industries), already have it so bad, if ACX is the only straw they can grasp at to show what might happen, let them. It can’t get any worse for them.

Can it?

Dav

“It is easy to create hypothetical contexts for the future without linking them to some logic.”

ACX.

“What incentive Amazon has to screw all the self-publishing authors?”

Profits. Why are the negotiations with Hachette going so sour? Amazon wants a bigger piece of the pie, and Hachette doesn’t want to give it up. Where Amazon sees a place to make more money, they’ll investigate it, and if they have a dominant market share, it’s even easier for them to take a greater percentage from indies, as they did with ACX. If indies are making as much money as Hugh’s AE reports say they do, I can’t see a reason why Amazon wouldn’t be looking there for a bigger piece. They’ve already made it so you have to be in Select to get 70% rates in India, Japan, Brazil, and Mexico, all markets we can expect to see grow hugely in the coming years.

“Why are the negotiations with Hachette going so sour? Amazon wants a bigger piece of the pie, and Hachette doesn’t want to give it up.”

Of course we don’t know exactly what the sticking points of the negotiations between Hachette and Amazon are but the traditional publishers have made their positions clear.

They like the agency model. They want ebook prices to go higher to save their print distribution model. They do not like Amazon. So for Hachette, what better way to control prices and Amazon’s market share than agency pricing.

Now Amazon is no angel either. Amazon knows that the traditional publisher are making tons in the ebook arena off the backs of their authors. (25% trad published authors/75% trad publishers). So, perhaps Amazon says to Hachette give me some of that 75% since we/Amazon have so much of the ebook market. Hachette of course says no.

I think these may very well be the “sticking points” in the negotiations between Amazon and Hachette — two titans who are looking to get the best out of the deal for their respective companies.

Yes, great points and an analysis confirmed by many of the commentators interested in what’s going on.

“Why are the negotiations with Hachette going so sour? Amazon wants a bigger piece of the pie, and Hachette doesn’t want to give it up.”

This is pure speculation, and it does you and your points no favors by repeating the publishers propaganda. Amazon offered to fund 50% of an author compensation pool and Hachette pissed on it. If that doesn’t tell you what they think of their authors nothing will.

It may be short-sighted of me to say it, but I say give big publishers the agency model. If they do increase prices dramatically, indies and small publishers will benefit most. Readers will be even more enticed to look at our offerings, because of the significantly lower prices, which still allow us to make a fine dollar from our work.

Dear Hugh,

This brings up an important point for me. Currently I have all my books in KDP Select because the 3 times I put my books into other bookstores (B/N, Kobo, etc) I was unable to get these retailers to place my books in the appropriate categories (where they would get maximum visibility) and as a result my sales were about a tenth of what I was making just from the revenue from borrows that I got through Kindle Owners Lending Library.

In addition, Amazon, both through CreateSpace and KDP staff, have been very supportive to me–not only in solving problems, but also providing additional support (my last book went on pre-order) beyond the tools they already provide for marketing (free and Kindle Countdown). But I would never discourage another author from trying a different strategy (not going exclusive) and sticking with it if it worked for them. Nor do I think that Amazon doesn’t make mistakes, and I know that not every author has found them as supportive.

However, neither do I feel that I am somehow contributing to the creation of a monster monopoly by having my books in KDP Select. Over time it has been very clear to me through my contact with Amazon support staff and analysis of their actions that they truly do want to figure out the best balance between serving their reader customers and their author customers (both traditionally published and indie), as well as serving their investors.

For example, when KDP Selects free option first was debuted, a free download = a sale. And for several month indies such as myself cleaned up (because traditional publisher refused to participate.) But this also meant that traditionally published books temporarily disappeared from the top of categories. KDP quickly changed the algorithm—but not because they wanted to screw indies—but because a list that was suddenly devoid of the historical mystery authors that customers loved—wasn’t serving their readers (or I suspect the traditional publishers who were probably screaming.) They have continued to refine the algorithm (which is one of the reasons free doesn’t work as well anymore) but at the same time they introduced Kindle Countdown.

Again, this looks like to me an attempt to wean readers from free (I suspect they didn’t anticipate how big a deal this would become) while at the same time trying to provide those of us who had become dependent on the post promotion bump in sales after free promotions with other alternatives. In short another example of their attempt to balance the needs of their readers and their authors (while also shoring up their bottom line.)

They are apparently now playing around with reviews (since on some book pages there appears a larger number of “ranked” versus “reviewed” ratings) which I suspect is partially a response to the complaints by authors about how difficult it is to get reviews and anger when reviews are removed because they run afoul of the rules. But I am sure that some will scream that these changes—if they go forward-––are just one example of how you can’t trust them.

When AXC changed the royalty share for authors another scream went up that this was them showing their true evil intents. Yet the ACX support staff is very responsive, the bounty program that they started has actually brought in more revenue than I was making previously, and they are making improvements in the free coupon distribution to help us sell our audio-books. I can only assume the changes were in response to some bottom line requirements—they needed more revenue—maybe to help in their expansion to UK (which of course authors had been agitating for), but I can not imagine it was done just to screw indies—because right now they need to attract more authors and keep them from deciding to go with the already established audiobook production houses.

In short, so far Amazon’s decisions—whether they have helped or hurt the sale of my books—always seem designed to balance the often competing demands of customer, author, publisher, investor—and not to hurt one group at the expense of another (which frankly has often seemed to be the strategy of traditional publishers—at least towards their authors.)

But, as Hugh has pointed out. If my needs were no longer being met by Amazon, or KDP Select, it would take me about one solid week of work to change strategies. For the midlist authors who depended on their traditional publishers—prior to Amazon—there weren’t other options when their publishers changed the game (cancelled contracts, lowered the advances, stopped marketing, insisted on onerous non-compete clauses). They had nowhere to go—and many of them simply stopped writing or faced a decade of no income—until the Kindle and KDP appeared on the scene. Some of the happiest authors I know now are those who were able to resuscitate their careers when Amazon’s KDP opened up.

Mary Louisa

Speculations about what Amazon *could* do are of minimal value in the absence of evidence, and have a flavor of precrime. Theoretically, I am capable of a number of heinous crimes, e.g. wearing mismatched socks. I have socks, I have feet, there is photographic evidence I have worn socks, and OTHER PEOPLE have worn mismatched socks. But until I actually commit the crime I cannot be apprehended under the National Sock Parity Defense Act.

Other companies HAVE abused their suppliers. They usually end up going out of business, because the abused suppliers go out of business. If I know this, so does Bezos. Amazon does not want to go out of business.

The only constant is change. There used to be palm trees in the Arctic Circle. Amazon is not evil for being a business, and it is not evil if it changes things to see if it can do better. (And yes, I was affected by the ACX changes but I had always thought it was just a great experiment–and sometimes experiments fail. The price you pay for the glorious successes.). Amazon is not evil for not guaranteeing you an income at a steady rate for life. Institutions that do that usually want a lien on your internal organs, and even then they sometimes default on their promises.

For all the reasons well stated above, there is little point in worrying about the future…

BUT… if we want something to really worry about: the bigger danger is that Amazon and the Big Five start working together more closely. The worst case smoky room scenario is that under political pressure from the media industrial complex, Amazon buckles against the bad press because it is more concerned about tax issues and other business concerns. Amazon agrees to secret deals to strongly favor Big Five books over self-publishing in searches and promotion. In the name of preventing “obscene material,” “protecting children,” and “enforcing copyright” it requires a fee for every self-published book to be rated for sexual content and copyright violations. Some books get rejected for mysterious reasons (typos?) and require extra work to get through the red tape. Self-published books are also banned to a ghetto that requires separate searching.

Even more modest changes to how Amazon allows book discovery on it’s site could have huge effects in favoring the big five, which would strongly help their arguments to writers that you have to sign contracts with them or your work won’t be found.

Amazon becoming too big and wiping out the big five I don’t see as a problem. But a more subtle back room deal worries me.

So the more I hear about how unhappy the big five are with Amazon, the better I sleep at night. And as for the present, I think it’s important to speak out in favor of Amazon’s good current practices in the face of what appears to be a media blitz to unfairly tarnish them.

I read this and thought, “OMG, I’m SO glad Hugh thinks the same way I do about this. I too heard the fear statements at BEA about Amazon someday changing the royalty for indie books.

(Speaking as a psychotherapist:) Fear of a HYPOTHETICAL future is NOT the reason to make decisions today. All fear does is make you stressed (which is also harmful to your body) and can lead to some decisions based on the fearful future you conceive in YOUR MIND, which may never materialize and certainly not in the way you predict.

The best thing you can do is realize that there are many things in life that are beyond our control. Therefore, it’s important to focus on the things that are in our control. One way to have mental peace instead of stress is to live below your means, save and invest your money, and pay off any debts. Then, regardless what happens AND how you feel about it, you have a solid sense of knowing you (and your family) will be all right.

(Speaking as an author:) In addition to the above, we need to focus on writing the best book we can, making sure it has a good cover and is edited and formatted correctly, then repeat that process. We can also chose whether and how to market the book(s.) We can’t control what Amazon or any other bookseller or publisher does.

I’ve had a LOT of wonderful things happen to me on my self-publishing journey and very few have been predictable. (Many occurred because of Amazon.) The couple of negative things I experienced had nothing to do with Amazon and were also unpredictable.

Whatever changes happen with Amazon and Traditional Publishers in the future, there will also be other changes and opportunities in the market, some of which we may know nothing about now. In addition, you’ll have changes in your personal circumstances which may also make an impact.

I’m not saying to live with your head in the clouds. Pay attention to the market, learn all you can about what other successful authors are doing, and follow your intuition.

Regardless of what happens with Amazon in the future, the company changed my life. I’ll always be grateful for that.

The bottom line: Amazon is a business, and we shouldn’t engage emotionally with a business. Many authors who self-publish with Amazon have been screwed with Big Publishing, so, while fear shouldn’t ever dictate choice, these writers are entitled to be wary, in my opinion.

Amazon has cleverly played the indie card. But the negociations with Hachette show us that Amazon also gives great advantages to big publishing: pre-orders buttons, stocking their books, helping them to market their ebooks and promo on the website…

So, Mackay Bell’s concern isn’t unrealistic.

We are also on the impression that Amazon acts as one entity. That’s not always the case with big corporations: sometimes, your left hand doesn’t know what your right hand does. That could explain the schizophrenic behavior of giving indies good margins, while at the same time collaborating with Big publishing to market their ebooks.

The thing is, unlike if you sign a contract with a large publisher, self-publishers aren’t stuck working with Amazon if Amazon starts changing things in ways that aren’t good for them. Self-publishers maintain ownership of their work and can always take it down if Amazon changes terms. So why worry? You only need to worry if you’ve signed over control to a publisher.

Worry is letting your imagination play with your fears. It takes time and energy and it has no utility at all. Being wary can help you when there are choices to be made: that’s why, for example, under the current conditions I won’t use KDP Select or Countdown for novels. I want Amazon’s competition (other platforms like Kobo or Apple) to survive, and to have a minimal weight in the future.

Well-put, Alan.

To respond to Sarah’s main point: Yes, self-publishers do own their work, but if Amazon grows so big it’s the only effective distribution platform, that really doesn’t matter. If Amazon changed their terms, you’d be stuck with them, because there’d be nowhere else you could effectively sell your work. You’d have to work a lot harder for a sale.

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“I’d rather live in a world where I do the latter and am eventually disappointed than the former world where I meet generosity with wariness and have my fears confirmed.”

Couldn’t agree with you more on that philosophy, Hugh. I’ve always tried to take that approach. Of course, I’ve been disappointed more times than I’d like but still, I think I’m coming out ahead anyway.

Hello Hugh!

I was reading the synopsis of his books and enjoyed. You are a good writer of fiction, another bad romance writer. People tend to not be good at all, have to have a real gripe. The only good thing I live in this story have been known or seen a better public and famous man. I do not know why you have passed through my life, hope you have more sense something different. Or have lived what really would like to live. Because I know that we express ourselves stories in books we’d like to live. If you wanted to love or be loved. I tell him that the second option was successfully performed. For truly loved you, love you or better. Most also know that God is in control of my life and lead me to the best path, which is to clear my heart and forget everything you told me and live. A fantasy a reality for you and for me.

Hugs forever …

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