David Gaughran on Amazon/Hachette

One of the sanest comments I’ve seen on this dispute was recently left by David Gaughran on another story warning indies that Amazon is coming after them next. David’s points are too good to remain buried, so I’m linking to the comment here and publishing it in full below:

David Gaughran:

Hi Nate, I won’t go over the ground other commenters have, but I will say this: treat all the news reports with skepticism. The Guardian piece from Weds, is based on a piece from the Bookseller on Tues, which is entirely based on leaks from Hachette UK execs.

Even if the leaks are true (which is an unknown) they could be very selective. Here’s a couple of sample scenarios (and I could do about 10 of these, all plausible):

Hachette wants Agency. Amazon wants Wholesale. Hachette says OK to Wholesale, but wants some of those Agency percentages and terms (i.e. a 70/30 split, but Amazon to swallow all discounting). As this deal is even better for Hachette than Agency was (or Wholesale was before that), then Amazon says, OK, but then we have to charge you for all the stuff we give you for free: pre-order facilities, co-op, etc.

Hachette then leaks “Amazon is making us pay for all this stuff that was free like pre-orders. Whaaaaa!”
Hachette and Amazon both agree that Agency is dead, but differ on the Wholesale split and how much Amazon can discount. Amazon thinks it should be more like print because it has to swallow all discounting under Wholesale, so it offers a (picking a random number) 60/40 split instead of 70/30. This will actually work out better for Hachette because it’s getting a guaranteed 60% of list, and Amazon will discount heavily (and shift more units). But Hachette doesn’t want Amazon to have power over pricing and discounting, so negotiations aren’t going anywhere.
Hachette then leaks “Amazon wants to massively cut royalty rates. Whaaaa!”
The fact is we don’t know. And I don’t trust the Hachette leaks to be the whole story. At all. Let’s not forget the Macmillan scenario for 2010, when EVERYONE was sure Amazon was the bad guy, and then it turned out that Macmillan was part of an illegal conspiracy to fix the price of e-books.
The Big 6 mounted the same global media push then – Amazon is destroying the book business! – and everyone fell for it.
Let’s be a bit wiser this time, and resist what is quite obviously a very sophisticated PR campaign from the large publishers.

It’s amazing to me that Amazon is still hammered for removing the buy buttons on Macmillan books even after getting all the facts. It’s also amazing to me that Hachette authors are complaining about delivery speed and pre-orders when Amazon published authors aren’t allowed in bookstores AT ALL. The consensus seems to be that Amazon published authors are to blame for signing with those imprints. The hypocrisy here — and the cruelty of that hypocrisy — are astounding.

22 responses to “David Gaughran on Amazon/Hachette”

  1. I agree about this all being hypocritical. A lot of tradpub authors seem to have an elitism born of suffering: “You didn’t get rejected and pounded into the dirt like I did. You just skipped the line. Ergo your success isn’t valid.”

  2. Amazon is great in my eyes. They created a system that gave a voice to all the voiceless; and they are generous with their royalties. They said “to hell” with the extremely subjective agent/publisher gate keeping going on. And I think all those big publishers are finally starting to see it truly affect their bottom line. Now they go on the offensive. Fact is, Amazon is such an enormous company that they could easily agree somewhere in the middle and not blink an eye. But they fight on principle. That, to me, is awesome.

  3. While only partially relate-able to Hugh’s post, I’d like to briefly recount a recent experience with one of the Big 5 publishers *coughHatchettecough*.

    The 4th book of a series recently was recently, and wouldn’t you know straight to hard-cover only.

    The previous three installments can’t even be bought in Hardcover (the third was released directly to large form paperback).

    When I asked when the paper-back version would be released (because I want all of them to match on my shelf) I was told not for about a year from now. Completely unacceptable since they started this practice on the 4th installment of the series only.

    Hugh I’ve seen a lot of posts of yours about this sort of thing and I really get it. The Big 5 or 6 don’t care about their customer’s wants, they care about price gouging once a series proves itself.

    I also saw a news article today on the BBC news app saying Amazon was “bullying” UK publishers (again, *coughHatchettecough*).

    Their PR power is apparently quite vast, and I want to say I’m thankful that authors like you are willing to tell both sides of the story, and share your experiences with the rest of us. Keep up on the information war, you are making a difference : ).

  4. Hugh, can you see a scenario in which Amazon actually turns out to be the bad guy here? I totally get that you don’t believe they are, and I understand your trust with them, but I’m curious (and I guess don’t know enough about how it all works to be able to decipher the media like I can with the few things I know about)

    1. Jason Lockwood Avatar
      Jason Lockwood

      I think part of the answer, and I’m not speaking for Hugh, is you observe Amazon’s behaviour over time. It’s not unlike observing people you know. When you meet someone new, you’re cautiously open if the person appears to be decent. You can’t really know if you can trust the new person until you’ve gotten to know him.

      But then months or years pass and you see that person is trustworthy. He does what he says and is generally consistent.

      MAYBE that friend will do something to betray you, but it’s unlikely given the history. And so it goes with companies you deal with. Is Amazon LIKELY to start doing all these awful things suddenly? Can THEY afford to betray the trust they’ve had to earn from their millions of customers over the years?

      Businesses like Amazon can’t afford to anger their customers. Yes, they want to make money and lots of it. But in order to do that, they have to continue to offer value to their customers. If they don’t, they’ll go out of business quickly.

    2. What Jason said. It’s possible, but I would be shocked.

      Amazon has a long history of fighting for writers and readers. Publishers have a long history of fighting readers and writers. They have recently been found guilty of colluding to harm readers. Why would anyone trust Hachette and distrust Amazon until all the facts are out? It makes absolutely no sense.

      1. Jason Lockwood Avatar
        Jason Lockwood

        I read an interesting piece that Russell Blake wrote recently about this affair. In essence, his view is let Hachette and other publishers keep doing exactly what they’re doing. His take is this is actually good for readers and it’s good for writers. I won’t paraphrase or copy and paste bits of his piece, but it certainly is an interesting take on the matter.

        Being the author of the high octane Jet series, I’d never expect a mild view of the world from Mr Blake. Definitely worth a read, whether you agree or disagree.

        1. If this is the article you mean, it’s anything but mild. For example, Blake characterizes the court’s judgment in the Apple+Big 5 collusion case as “a rumor.”
          He refers to Amazon as a tyrant and companies like Hatchette as defenders of literature against the unruly hordes (us.)

          Loaded with anti-Amazon, anti-indie hyperbole. Neither balanced nor mild.

  5. Is the difference that Big Publishing is basically a monopoly but retail is not? If a reader wants a James Patterson book, it comes from Hachette, as they’re his publisher (Little Brown actually, part of the Hachette Group?), even if you can buy the book from any of many retailers, of which Amazon is only one. Amazon has to buy from Hachette as they’re the only real source for Patterson’s books. Us readers can buy our copies from Amazon or any of many other retailers who all buy from Hachette. Hachette can control their output, who gets what and when. Retailers like Amazon can buy or not buy, forgoing the sales of those books, but us readers can just go to another retailer who will supply them. Big publishers can exercise their control. It turns out so can retailers. Hachette doesn’t lose as much as the retailer refusing to buy as most customers will just go to another retailer to purchase. A big retailer like Amazon, who is widely diversified, doesn’t lose as much as a smaller one who is not.

  6. […] The Guardian cited “experts”, stating the supposed terms Amazon is demanding from Hachette would amount to assisted suicide. TeleRead points out that these “experts” are in fact book publishing pundits, cited only because of their support for the industry they are a part of. Those horrible terms by the way, Hugh Howey and David Gaughran have a few things to say about the context of these “leaks”. […]

  7. […] Here are two plausible scenarios. […]

  8. There is not only an enormous media bias but also a studied imperviousness on the part of many of the other players. I was witness recently to a lively conversation between an independent bookstore owner and a NYT best-selling author as they railed against Amazon and the “pro-Amazon” DoJ (yes!) and praised the beleaguered traditional houses and retail stores. As an indie author whose micro-publisher is in bed with Amazon, I can’t get my books into such stores, which refuse on principle because the telltale barcode and “printed in” on the last verso page of my books proves they were printed by Amazon’s CreateSpace–despite an independent imprint with its own ISBNs.

    Bookstores and publishers claim they are on the side of authors while Amazon is robbing royalties. The facts disprove them. Bookstores are on the side of bookstores, publishers are on the side of publishers, and Amazon is on Amazon’s side. The difference is that Amazon has opened the gates and leveled the playing field for many thousands of talented indie authors while both bookstore and publishers have kept the gates closely guarded .

    I love brick-and-mortar bookstores and continue to patronize them, but I have to ask myself, who is on my side as an indie author?

    –Larry Constantine (pen name, Lior Samson)

  9. Hugh, David asserts in his comment the following:
    “The Guardian piece from Weds, is based on a piece from the Bookseller on Tues, which is entirely based on leaks from Hachette UK execs.”
    This is factually untrue. The Bookseller piece makes it clear that it was based on conversations with a number of UK publishers, and while there may be parallels with the Hachette USA negotiations, the piece was about what is happening between Amazon and UK publishers.
    The Guardian did its own separate research to stand up the claims, as did the BBC which also filed a piece.
    I understand the desire to view this as a battle between two big corporate giants, sadly it is not.
    Philip Jones

    1. Hi Philip,

      Thank you for the correction. This was a quick comment I had dashed out on Nate Hoffhelder’s blog, but I did expand the thoughts in this blog post (noting the correct provenance of The Bookseller piece: http://davidgaughran.wordpress.com/2014/06/28/media-bias-and-amazon/

      If you take the time to read that, you will see exactly why I’m unhappy with The Bookseller’s coverage of these issues.


  10. Thanks David, I read your piece. The Bookseller report was properly sourced from multiple contacts many of whom I spoke to myself. Both the Guardian and the BBC followed up with their own independently researched pieces.
    In my experience accusations of bias are only levelled when there is an unwillingness to engage with the substance of the report. Many UK publishers (outside of the top 5) are genuinely concerned about the pressure Amazon is now exerting, the nature/legality of the clauses on the table and what their impact on their businesses might be.
    The debate should be around that, not the imagined fallibilities of the messengers.

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