Hugh Howey

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

Learn more

Snowflakes United

I guess that would make them snowballs?

This group of authors should stick to writing. Where they can edit. And they don’t have to speak live. Especially about things of which they know less than nothing (that’s where what you think you know is gobsmacking-bonkers-wrong).

Roxana Robinson is president of the Authors’ Guild and a vocal supporter of Authors United, which is continuing their appeal to unreason. Here, she is absolutely crushed by Paul Kedrosky, who does an admirable job of not cracking up on camera.

The argument being made by Authors United is that books are not products and are therefore not subject to distribution agreements. The fact that Hachette does not want to negotiate with Amazon is not their concern. The fact that Amazon and Hachette do not have a long-term distribution agreement is not their concern. They claim not to be taking sides, but they have yet to appeal to Hachette to negotiate in good faith. Instead, they call on Amazon, a retailer, to capitulate to whatever demands Hachette, a multinational conglomerate, is making.

Their most recent letter is being sent to Amazon’s board members, whom I assume know a thing or two about business and will get a laugh out of this nonsense. In fact, the letter was so offensive, that Authors United had to go back and edit it (which made it more offensive). Books written in China by Chinese authors are denigrated in the original; in the new version, all non-US authors are deemed to be inferior.

Thanks to Nate Hoffelder at The Digital Reader, you can see the differences between the two letters here. Neither version makes a lick of sense.

During the interview posted above, Roxana says a few contradictory things that should raise eyebrows. Somehow, Amazon is hurting Hachette authors with lower sales, but at the same time Amazon’s customers are revolting and simply buying these books elsewhere. So are sales down or are they the same? In the Authors United letter, Douglas Preston writes that sales are down and that these lost sales are not being made up elsewhere. And Amazon’s reputation with its customers has indeed moved; it’s gone up.

But why deal with facts? These are special people who do something that can’t be outsourced (ignoring the dearth of foreign literature translated into English) and can’t be done cheaper (ignoring the fact that publishers aren’t putting the same resources into acquiring, editing, designing, and releasing books). Do they really take themselves this seriously?

The fact is that they wrote a book meant to entertain or educate. And then, instead of controlling that work of art or giving it away, they sold the rights to a company based in France, which will own those rights for the rest of their lives and the lives of their children. They sold out. They made a deal. They took a wad of cash, as if their art were no more than a crate of razors. They no longer have a say in where the books are sold or for how much.

While I’m sure practically everyone is sick of hearing about this standoff, I hope the bizarre PR campaign being waged by Hachette, the New York Times, the Authors Guild, and this handful of authors is unsuccessful. The aim here is the same as the collusion between the Big 6 and Apple, which was to jack up the prices of ebooks on customers.

Cheating didn’t work. Lying isn’t working. And suing isn’t going to do it either.

My advice to Hachette is to start competing. And my advice to authors is to stop selling your art like so many cheap, outsourced products, and then pretending like you still own it.

 

 

91 replies to “Snowflakes United”

Yes, but tell us what you REALLY think, Hugh.

/wry tone

I think your question, “Do they really take themselves this seriously?”, captures it. Because the answer is yes. They do take themselves that seriously. It is a mindset not limited to writers, but the current situation is certainly giving the mic to a lot of people with that mindset—or who readily follow others with such a mindset, out of trust (of the person/people with the mindset), fear (of change), or misunderstanding (of what causes X).

And then once someone has publicly voiced an opinion? That makes it all the harder for them to be willing to admit they might’ve been wrong. Which explains how much more ridiculous this is getting.

(Okay, so I found it ridiculous from out the gate. But w/e.)

Carradee,

Right on point, and hard to believe that they do take themselves that seriously…

Competing is not what they want. They want the monopoly without giving the customer enough value, service, and utility to ever get there.

I go to a lot of conferences and conventions, and have been hosted by several retailers and publishers. One of my Big 5 publishers sent me on book tour and put me up in a Four Seasons (or equivalent) in every city, including the Beverly Wilshire. Another Big 5 publisher flew me to London and put me up in a private apartment and wined and dined me all over town. My German publisher put me up in the Savoy; my Taiwanese and Brazilian publishers flew me first class and treated me like royalty.

I’m swayed by none of these things. I care how publishers and retailers treat their readers and their writers. That’s who I side with.

By Post Author

Well said Hugh, take their money because you are making money for them, that doesn’t mean you sell out, you are using them as they should be used.

Alright, so I’ll be the first to admit that I don’t know all the details. If my response is clearly neglecting a glaringly important detail then please correct me.

We have a dispute between two massive corporations. It’s the kind of dispute that, once resolved, will set a major precedent for the future of publishing.

The results are either going to be: “Amazon wins.” Wherein the publishing houses are disrupted and the ebook is forced into a reasonable distribution method for authors at every level.

“Hachette wins.” Wherein big publisher ebooks maintain an absurd price that is meant to deter the average buyer from fully adopting the format, keeping relationships with traditional booksellers intact. Basically, maintaining the status quo.

My question is: does either result actually benefit the average self published author?

In one scenario, the market grows exponentially due to mass adoption. Competition gets more intense.

In the other: status quo, which seems pretty good, too. It ain’t so bad now, is it?

So why should I throw a vote in on either side? What’s in it for me?

“My question is: does either result actually benefit the average self published author?”

That depends. Does the self-published author care about ever publishing with a large house, just to diversify their offerings? If so, do they want their publisher charging $14.99 for their ebooks?

Also: Does the self-published author think more people will take up reading as a hobby if publishers form a cartel and overprice their wares? And do they think that might affect how many people are in the game to purchase their self-published works?

Finally: Does the self-published author care about other writers and readers in general? Or do they just care about themselves?

By Post Author

Most important, Hugh, as you mention, Hachette “winning” will reinforce the current “traditional” model where once you contract for a publisher to sell your book, you lose control of it forever, no matter how terrible a job they do, or if they just stop selling it (as they do most books).

No matter what else happens, this has to change, and it won’t change until one of the traditional publishers breaks free of the cartel and offers authors contracts that have specific termination dates and clear language.

Traditional publishers *are* breaking free. I’m working with one now—and we put my contract together, together. The onus is really on authors to insist on what they want out of a publishing contract.

Robert, I think you are missing what I think is the key detail. This isn’t just about keeping prices high. It’s about price FIXING. (Which is what the big five originally conspired to do with Apple’s help before the DOJ stepped in. And it’s what they are hoping to achieve now through less illegal means, starting with Hachette’s new contract.)

Price fixing means that all books have to be priced the same at all online retailers. That means Amazon has no method of competing with Apple’s iBooks or other online retailers the publishers work with or create in the future. That means there is no reason to buy at Amazon rather than somewhere else. That means Amazon’s market share goes down.

Why do the publishers want this? First, it means that Amazon loses power over the book market, probably forever. That means more power for the big publishers. But there is another reason. It takes the “dirty” market economics out of publishing. When making a deal with Amazon or Apple, those companies have nothing directly to offer, like lower prices or a bigger market. So what replaces it? Smoke filled backroom deals. If you want access to our books, you have to promote these books over others. Not because they will sell more, but because we want to promote them. (IE: influence peddling. To justify paying huge advances to politicians and others in power. And less direct agendas like providing “creative” jobs in New York to the children of the wealthy, being associated with “important” artists, backscratching Ivy League schools, simple snobbery in favor of literary fiction, etc.) They also have other corporate interests they might want to promote, like certain products unrelated to publishing, or even corporate agendas. These big publishers are owned by giant companies with interests that are much greater than making money in publishing. Controlling the book market is about having the power to decide who the tastemakers are and what is talked about in the world. (Otherwise, the big publishers would be engaged in a simple debate with Amazon about what prices and polices will sell the most books and make the most money.)

It is true that high prices are also an element of this, mostly to protect the print market. But protecting the print market is again about their ability to control what books are perceived as being important. (Like manipulating the NY Times bestseller list.) If the big five abandoned print, or left it to small publishers, they would probably make bigger profits focusing on digital. But then they would lose their historical influence over “important” books and anointing “important” writers with big print runs. They would also have to offer contracts to directly compete with what writers can make self-publishing, which also means less power.

If the big publishers win and force price fixing across the major online retailers, why would that be bad for self-publishers? (Other than not wanting four or five huge corporations to dominate the market of ideas.) Presumably, self-publishers would still be able to set their own prices and distribute where they liked. But, a weakened Amazon, with less share of the book market, means fewer book customers searching for books and stumbling upon the self-published work. It also means Amazon has less money to reward self-publishers and create innovative tools to help them. (Remember, not only do fixed, higher prices hurt Amazon’s market share, but they hurt overall sales and profits.) There is also, I believe, a real danger that part of the smoky backroom deals that the empowered traditional publishers make will be to promote their material over self-published works and even possibly deals to require the ghettoing of self-publishing in small and large ways. (Remember the publisher who mused aloud that self-published work should be in separate sections on Amazon?) Amazon might not agree to this, but Google sure might (they already do a lot of ghettoing of user created content on You Tube). And I’d worry about Apple which is likewise more focused on big name artists in iTunes. Once those retailers had equal or superior share to Amazon, the big five could threaten to simply pull their books off Amazon all together if they don’t play ball with whatever they want. Including diminishing the influence of self-publishers.

As Hugh points out, fixed higher prices also means reading in general has a harder time competing against other forms of entertainment. (Something that is not as big a concern for giant companies that also own competing forms of entertainment like Fox and CBS.) Which is why the main agenda of the big publishers has always seemed to be something other than promoting reading and serving readers efficiently and profitably. They are more than willing to settle for more control over a smaller group of readers.

There is still an open question as to whether the self-publishing genie can be put back in the bottle. But I think there is a lot less question that that is what the big publishers would like to do, and that the Hachette/Amazon fight is part of a larger effort to try.

Price Fixing favors incumbents, unless they screw up big time.
If you look at the conspiracy, Apple was getting almost no traction with iBooks until they crippled competitors by forbidding in-app purchases without confiscatory fees.
They went as far as forbidding Kobo from even mentioning in their app that they had an ebookstore.
Even then, Amazon kept rolling merrily along.
We lost fictionwise, we lost booksonboard, we lost Diesel books, we lost even Sony, and we lost who knows how many potential startups who, right at the peak of ebook adoption, the time to forge long term consumer relationships, they were handcuffed and prevented from doing loyalty programs, micropayment rebates, book bundles, bogo deals, and all sorts of modern marketting techniques. Instead, they were forced to sell the same books at the same prices as Amazon, that already had a loyal customer base, the largest ebook catalog, the most-customer friendly policies, the best customer support, the only dedicated reading gadget that (at the time) was PC independent, and (once Nook forced a switch to near-cost pricing) had the cheapest dedicated ereaders on the US market, which in turn squeezed out all the hardware only ereader vendors.
Price fixing didn’t cost Amazon any market share, instead it strengthened their hand to the point that the first class action suits over the conspiracy named them among the defendants even though the public record clearly showed their opposition. Before the conspiracy kicked in, Amazon’s fabled “90% share” of early 2009 (the result of the Oprah boost) had already been wittled away by Nook–they bragged of 26% in spring 2010, reporting pre-conspiracy sales–and a small crowd of independents relying on interoperable epub, to a level I saw quoted as 54%. By the time the conspiracy ended, they were up to 60% of a much larger market and, by Hachette’s own numbers, as high as 66%, with Nook’s self-inflicted wounds knocking them to the high single digits.
Absent price competition, customers go to the largest, most customer friendly operators with the best cutomer experience. Which means Amazon. Who, not incidentally, has been busy lining up a catalog of over half a million exclusive Indie titles.
Hachette has made it publicly known they want a return to no-discount agency and $15 ebook prices despite all the evidence that it will result in a three-player market controlled by Amazon, Apple, and Google because, like the rest of the conspirators, their primary interest is maximizing reader-spend and crippling the ebook marketplace to protect their print-based power over authors.
Or so they think.
Amazon doesn’t yet have an ebook monopoly but those goals, if realized, will give them one. Which is not good for anybody. Even Amazon understands they are better off with half of a vibrant, competitive, and *large* ebook market than 80-90% of a stunted market.
Amazon is going to be top dog for at least the next decade: no magic bullet is going to change that just as nothing is going to stop indie author publishers continuing to take market share from the Manhattan Syndicate.
The question for authors, tradpub and Indie, is which world they want to live in: the one controlled by a handful of foreign multinationals or one controlled by readers voting their wallets.

Probably the best insight into the whole situation that I’ve yet seen:

“Amazon doesn’t yet have an ebook monopoly but those goals, if realized, will give them one. Which is not good for anybody. Even Amazon understands they are better off with half of a vibrant, competitive, and *large* ebook market than 80-90% of a stunted market.”

The cream will always rise to the top, more competition means better goods. The same argument was made with paperbacks and straight to dvd movies, ‘there will be so many the market will flood’, and yet before Amazon it was hard for me to find a good book to read, and I still can’t find enough good movies, lol. Which means there is room for more.

When I wrote to Douglas Preston as you suggested, he too took offense at the suggestion that books were products that could and should be negotiated like any other. I tried to say, Charge whatever you want–you’re welcome to–just don’t expect every retailer to buy at whatever price your wholesaler wants to charge.

The best I can figure is that Amazon, to them, is just a pipe that stuff comes out of. It’s as if Amazon owes them a free platform. I just don’t get it. I’d like to think it’s cluelessness, but there’s an awful lot of money involved for them, and they don’t seem like dumb people.

Oh, well. I’ll vote with my dollars.

I could have sworn i learned in Economics 101 that ANYTHING that can be sold is a product, even we are products, selling ourselves to our bosses. If you produce, you are producing a product. If you can sell it, it is a product.

If these people don’t see books as products, why are they sending their manuscripts to corporations who sell them as products? Give the works away! Donate the proceeds to charity!

What’s really weird about the appeal to outsourcing and cost reduction is that one of the biggest forces behind this movement is James Patterson, who DOES outsource the writing to ghost writers and HAS found ways to make writing cheaper and produce higher margins. The guy is making 90 million a year. No wonder he’s moved to the backseat and has allowed Douglas Preston, with his mere 300 acre estate, do the campaigning for him.

It’s all so crazy that you have to marvel at the number of people falling for this.

By Post Author

This interview really is the car wreck you just can’t stop watching. She manages to be elitist, condescending, prickly, factually incorrect and utterly clueless – all at the same time. That’s entertainment.

The most amusing logical error may the use of the software industry’s vigorous defense of intellectual property as justification for the “special protection” this group seeks for authors and books.

Um, the corollary to that argument in book publishing would be DRM, not e-book distribution or pricing.

That, of course, is not what this contract negotiation is about (not to mention that no company enforces DRM more strongly than Amazon – for better or worse).

But hey, letting facts stand in the way of hubris can be so inconvenient.

http://en.wikipedia.org/wiki/Flat_Earth_Society

“This interview really is the car wreck you just can’t stop watching. She manages to be elitist, condescending, prickly, factually incorrect and utterly clueless – all at the same time. ”

That’s a perfect summary of it, for anyone who’s having trouble accessing the video.

One good thing came from this video.

I now fully understand why these authors at Authors United are fighting so hard to keep the status quo…

… because they don’t have any business acumen whatsoever.

The public meltdown (Get it? Snowflakes…) I just watched was funny though.

So, instead of addressing why Amazon should continue to carry Hachette books in the absence of a contract, we discover that books are not products and that the Authors Guild is morally opposed to the term ‘special snowflake.’ What I would have preferred to hear was a cogent argument why Amazon should take special steps to protect Hachette authors from Hachette’s unwillingness to negotiate a contract, while Hachette, the company with whom those authors have contracts, is under no such obligation. Her position is particularly puzzling when you consider that those Hachette author contracts generally yield authors under 20 percent of the proceeds, potentially for generations. Is it any wonder they’re suffering? Even if I agree for the sake of argument that books are precious snowflakes, it doesn’t follow that Amazon is therefore obliged to sell them at all, much less sell them on equal terms to the books of Publishers who do have a contract.That this argument gets any coverage at all underscores the desperate need for improved media literacy in this country. Apparently a gift for writing in no way implies a commensurate aptitude for critical thinking or persuasive argument. That said, I wouldn’t envy anyone tasked with attempting a cogent defense of the Preston letter.

The irony is that Hachette authors are getting exactly what they sought when they signed with a major house. They willingly gave Hachette the exclusive right to negotiate distribution and pricing contracts for their work. Of course, that decision was made in enlightened self-interest, based on a belief that Hachette’s clout would serve mutual objectives (nothing wrong with that).

Now that the balance of power is shifting (or leveling, at least), authors are not happy with the results of that decision. But that’s what contracts are for; to define what happens when things go wrong.

Anyone ever made a decision you later grew to regret? Did you ask for special dispensation because your work was so utterly precious? Me neither.

They want the benefits of being signed on with a large publisher like Hachette but they want some else to absorb the negative consequences, in this case, Amazon. I think it’s probably because, for so long, that contract was gold, just getting it was the end goal for many and, in some cases, it didn’t even seem to matter what that contract actually says. I don’t think it’s fully sunk in yet that there are downsides to signing on with a publisher. As things are progressing, those downsides appear to be getting more and more prominent, and in result, the positions of those defending them are getting more and more incoherent.

A lot of people who make bad decisions (or more often, “bets that didn’t pan out”) request special dispensation to free them of the consequences of their gambles. Did you take on more mortgage than you could handle, back before the bubble burst? Did you take out a massive loan for an overpriced college education? Did you run your bank or automaker into the ground? Members of all of these groups have asked for (and sometimes received) special dispensation. (Although I don’t think any of them had the chutzpah to present themselves as special snowflakes when making their demands.)

It’s hard not to feel for the people who’ve made bad decisions, especially when you can tell that those decisions looked reasonable at the time. Signing with a publisher sounded like a great idea for decades. It’s easy for a self-published author to look at Hachette authors and say “There but for the grace of Kindle go I.” (If you’d had a chance at a traditional publishing deal 10 years ago, you’d probably have taken it, right?)

So I don’t like seeing those authors being hurt. At the same time, I’m not particularly inclined to root for them while they’re preaching blamelessness and entitlement. When someone makes a mistake, you want to forgive them, but you really want them to take responsibility first, so they don’t just end up right back where they were. And when these guys blame Amazon — rather than Hachette and themselves — clearly they haven’t even begun to take responsibility, or to identify the mistakes that led them to their current predicament.

I do support all authors, but I’ll support Hachette authors far more enthusiastically when Authors United comes out with a letter that says something like: “You know what, signing our rights away to Hachette was our first mistake. We take responsibility for that. We advise other authors not to make the mistake we made. And we ask Hachette to either negotiate with sellers in good faith, or return our rights to us so that we can do those negotiations ourselves.”

I’ll never find out if I like Preston’s novels, because I cannot bring myself to pick up a book by someone spouting the illogical, elitist, reality-free rubbish he’s been spewing all over the place for the past month or two.

Amazon would probably give any famous author specail consideration if they wanted it. I am sure if Stephen King chose to publish through Amazon, he would get mounds of free advertising, and would make so much money he could burn all the money he has already made, lol. This is what I am waiting for… Instead of an author finding success self publishing and then being picked up by a major publisher, I am waiting for the reverse, I am waiting for a big author to rrealize how much more he can make with Amazon.
Like Bunkers statement when a publisher offered to sign him, “I already made more than thay last week”, lol.
The major problems with author is that they think success came from the publishers, it didn’t, it came from readers. If famous authors went to Amazon, the people would follow.

“What I would have preferred to hear was a cogent argument why Amazon should take special steps to protect Hachette authors from Hachette’s unwillingness to negotiate a contract, while Hachette, the company with whom those authors have contracts, is under no such obligation. ”

Authors United and the Authors Guild will not tolerate this sort of ambush, and they are even now contacting the DoJ in protest over your attempt to address the matter with logic.

It reminds me of that Simpson’s episode where they’re in a massive hole:

Homer: We’ll dig our way out!
*digging*
Wiggum: No, no. Dig up, stupid!

Snowflakes United decided to go for the emotional argument instead of addressing the real and rational dispute, which is about wholesale pricing. Now they’re stuck in this weird parallel universe, refusing to talk about price in a disagreement over pricing–a universe of razor blades, whales, and snowflakes.

And their only solution is to try to dig up.

The reason Hachette is having to coordinate this attack through its authors while staying mum is because of their price fixing and collusion settlement with the DOJ:

“Settling Defendants shall not retaliate against, or urge any other E-book Publisher or E-book Retailer to retaliate against, an E-book Retailer for engaging in any activity that the Settling Defendants are prohibited by Sections V.A, V.B, and VI.B.2 of this Final Judgment from restricting, limiting, or impeding in any agreement with an E-book Retailer.”

From: http://www.justice.gov/atr/cases/f286800/286808.pdf

I bet there’s a lot of double-deleting going on at Hachette right now.

By Post Author

Hugh,

This puts your harping on Preston’s “I’ve not spoke to Hachette about this” into perspective. I don’t think you’ve gone so far as to say that this author campaign is a federal judgement violating campaign by Hachette.

I’m not sure you’re completely right. I think conversations between people at Hachette and authors got the idea across that Hachette could not directly suggest that readers buy somewhere other than Amazon. The original question may have been asked by an author, probably Preston or Patterson. That led to the big authors being informed and this campaign. Depending on what was said, Hachette might be potentially violating the federal judgement. I

This is definitely something interesting to think about. Thank you for getting me started down the conspiracy route. Usually conspiracy theories are irrational garbage. This one is pretty good.

I can see it now….

“Whatever you do, DO NOT (wink) put out press statements (wink), full page ads (wink), or open letters (wink) to Amazon deriding them for not kowtowing to our demands (WINK WINK).” –Hachette exec speaking to Hachette authors

If Hachette isn’t supplying Authors United with sales figures, how is AU able to make this statement?

“These sanctions have driven down Hachette authors’ sales at Amazon.com by at least 50 percent and in some cases as much as 90 percent.”

It sounds to me as though the meaning they intend with the statement is that every Hachette author’s sales is down by at least 50 percent. How could they possibly know that without Hachette (or Amazon) telling them?

If that’s not what is meant, it’s an example of writing that is intended to mislead readers. “Some Hachette authors” is not the same thing as “Hachette authors”.

Guys, I think you may have missed the point of the video. What I got out of it is that books are not bricks. Apparently, Amazon also sells bricks (www.amazon.com/dp/B000UEYZ4S/) and those bricks are NOT special snowflakes. :-P

Seriously this whole video just shows how ridiculous Authors United sound when up against someone who even vaguely understands what’s going on here. I love the part where Kedrosky said, “Almost no words of that that I agree with.” That’s how I feel about Preston’s first letter, his NY Times article, and just about everything Authors United has said since they started this nonsensical campaign.

I agree that books are special. There’s nothing I love more in this world than a good story. But the minute an author signs a contract with a publisher to sell it, that story becomes a product. A publisher is a wholesaler because they create and distribute books at wholesale. What is so hard to understand about this? I’d challenge Preston or any of AU to let their contract with Hatchette expire and then tell them they have to continue to produce and sell their new books because they are more than mere products. They are special. How do you think that conversation would go?

The one thing I’ve been hoping somebody like Hugh would say is that if publishers are more than just a business, they are curators of literature, or protectors of culture, then why are they so concerned with profits? Why aren’t they all Non-profit organizations? They could sell their precious wares for just enough to break even and continue to enlighten humanity. Authors could get a bigger cut and readers could get cheaper books. How do they get away with being painted as these noble souls who only want to bring literature to the masses while stuffing their pockets with money stained with the blood, sweat, and tears of authors?

Riddle me this.

Amazon is a distributor of products. If books are not a product as Roxana claims, than why would Hachette even care that Amazon is no longer interested in distributing them promptly?

I can’t believe any human being can be so far removed from reality.

People get offended so easily it’s ridiculous. He made a valid point and she completely avoided it by jumping back to a term she disapproved of. I don’t know much about this issue, but I just wish that people could swallow their pride and have a good discussion like adults. Because discussions like this one lead to nothing but anger and frustration.

When I first clicked on the article, I actually had to check and be sure they weren’t doing an Onion piece…sort of making fun of themselves in the vein of Saturday Night Live. It’s just so ridiculously bad that I figured it had to be satire.

Alas, it isn’t.

And I wondered if she went home and spent the evening face-palming and asking herself why she said those things. But I realize that she probably went home and accepted congratulations on what a bang up job she did.

Delusion is strong in this one. And I want to buy Paul a beer. A good beer.

Technically, books aren’t commodities. But virtually no consumer good is a commodity. All of them are designed products, made from commodities, using intellectual acumen to shape those commodities into a unique product. The iPhone, for example, is made from commodities such as silicon, iron, plastic, steel, and rare earth metals fashioned into computer chips, screens, and so on. Its software is designed as intellectual property, and incorporated into the final product through electronic bits, which are also commodities. Just because the iPhone is the product of design does not mean that Apple can require retailers to sell it for them. They have to have a business agreement for that.

Likewise, books are made of commodities as well. Paper and ink are commodities. Likewise, digital bits are commodities, and extremely inexpensive ones. Each paper book is mass produced, usually outsourced to China (oh, the irony is rich), and then distributed as a commodity to bookstores. Each printed book of the same title is exactly the same. The paper that constitutes the books is everywhere the same, though of differing grades depending on the publishing method. Even the words on the page are constituted of the same ink everywhere. The only thing that differs is the intellectual content.

Eeven then, the way publishers price their books seems to depend almost entirely on the method of production, not on the quality of the intellectual content. In other words, they price books as if they are commodities, and they ship them to bookstores as if they are commodities, and they treat the unsold books as if they are commodities. Nowhere does the intellectual content determine the pricing or distribution of the book. Only costs of production, supply, demand, and distribution channels determine that. If the price of paper and ink and printing costs were to go up, that would affect the pricing of the book, but not the sweat on the author’s brow. What the book might have cost the author to produce doesn’t figure into the price at all, nor does the quality of the finished book matter either. Supply and demand does figure in, in that if the book doesn’t sell, it is usually remaindered at very low prices. But supply and demand doesn’t tell us much about the intellectual quality of the book. It may only reflect the success of the book’s marketing, not its content. Many great books don’t sell well, at least initially.

So I fail to see how books don’t contain elements of both consumer goods and commodities. Anything that is mass-produced for sale, no matter how much intellectual design goes into the final product, will always exhibit something of both of these. It was different in the days before the printing press, when each copy of a book was individually hand-crafted and copied by a scribe. But since Gutenberg, books have been both consumer goods and commodities, and especially in the 21 century, they have been published, distributed, and sold as mass-marketed consumer commodities. That’s what has enabled authors to grow rich from their sales, in a manner never before possible. So maybe they should stop bitching about that.

“ACX Lowers Royalty Rates”
Personally, I’m shocked that Amazon would do anything to fuel the speculation that once they grow big enough, authors will suffer. Whatever margins they hope to improve by this 10% move can’t possibly be enough to cover the damage they’ve caused in public relations or the power they’ve granted to their detractors. Hugh Howey
http://authorearnings.com/acx-lowers-royalty-rates/

I’m curious, Hugh. When Amazon increases its market share of book sales, and then turns round and squeezes publishers and authors (including self published authors), will you be shocked again? Naivety isn’t an attractive quality.

ACX never said its rates were permanent, but were an introductory offer.

ACX is not the same kind of business that KDP is. It actually produces audio books, hiring actors and paying salaries. It puts money out up front and tries to make it back later. And it’s having a hard time of it. KDP is quite a different animal. Trying to draw a comparison between the two does not make for a good argument that KDP will lower author royalties, since it has virtually no overhead costs, all of which are borne by the authors.

How will authors suffer? They might get 60% instead of 70%? That is still three to four times more than they would get with a publisher.

I’m not here to be pretty.

But let’s side with the people colluding to screw its customers and paying 25% of net because of what the company paying 70% of gross MIGHT do in the future. Now that’s hot.

By Post Author

If at some point in the future, Amazon were to abuse its market power, that would create an opportunity for another platform to compete and offer better terms — just as high prices opened the door in the past for B&N in the 80s, and Amazon more recently.

I hear this argument often, and I find myself bemused by it.

If (big if) Amazon gains so much market share that it can cut royalty rates or start to put the thumbscrews on indies who are in Select, then:

1. You will see indies reduce their participation in Select and expand their reach on other retailer platforms. Select terms are only for 90 days. Even if non-Amazon retailers see a reduction in new titles being sold as a result of Select, there are still plenty of titles available to keep the bigger platforms as robust as their parent companies want them to be, and those venues will be there in the event of a mass exodus from Select.

2. Indies will explore/implement selling directly to their reader base.

3. New platforms/retailers will appear in the marketplace.

Most indies choose to go with self-publishing because they are adaptive entrepreneurs (in addition to creative storytellers). The amount of time it would take for me, personally, to get a direct-to-readers sales page on my website in the event of total retailer collapse (which won’t happen) is about a week. I’ve done the research and haven’t chosen to implement it yet, but I could quite quickly.

Indies who choose to target the reader-author relationship as the cornerstone of their marketing keep themselves adaptive and flexible. Readers don’t disappear en masse — if a reader is enough of a follower of your work, they’ll follow your books wherever they go. While indies might see some reader erosion, any indie who carefully cultivates that reader-author relationship should be able to rebuild quickly.

TL;DR: Indies can adapt if Amazon cracks down, and the marketplace is flexible enough to allow for it. The sky isn’t falling.

Amazon are squeezing Warner Bros over dvds, they’re squeezing Disney too. Do you think Disney couldn’t set up a website and go direct to the consumer? Do you really think Amazon are going to give some exemption to self published authors? Amazon have 65% of the ebook market; if you leave their platform you will lose a significant portion of your sales. When the squeeze comes, it will be worse for self published authors than the big publishers because self published authors do not have the scale to cause Amazon trouble in negotiations. Look at what happened in the music industry ; the major technology platforms have to negotiate with the large labels, whereas they just dictate terms to smaller labels and independent musicians.

Naivety isn’t an attractive quality.

Neither is concern trolling.

True naivety is basing your business decisions based on what might happen, rather than what is currently happening. Being worried you might be eaten by wolves tomorrow, when there is currently a lion chewing on your leg, is really, really stupid.

When Amazon increases its market share of book sales, and then turns round and squeezes publishers and authors (including self published authors), will you be shocked again? Naivety isn’t an attractive quality.

I would be very shocked. One of Bezos’ famous quotes is, “Your margin is my opportunity.” A player able and willing to take a lower profit margin can beat the player who with the higher profit margin.

So, if Amazon did turn around and squeeze, it would be increasing its profit margin and offering opportunity to Apple, Walmart, Google, etc.

And naivety? It’s very attractive if the alternative is refusing today’s opportunities because I’m not sure they will be there tomorrow.

It’s funny because I was discussing with a fellow entrepreneur the absurdity of this “Authors United” PR campaign when I saw the letter to the board members… It’s like these people have no idea of what running a company or being a board member means, on top of not understanding at all the conflict that is going on.

There’s one thing that is really striking me though, and it’s the fact that this seems to be best-selling trad. authors vs “indies”, and the indies are fighting not for themselves, but for the low-list and mid-list trad. authors.
But what do these mid-list traditionally published authors have to say? Are we ever going to have an answer to this question? Because right now we have Preston saying they represent all trad. pub authors, and you, Hugh, saying more or less the same. Who’s right?

I’ve had Hachette authors come up to me in person and thank me for fighting for them. I’m sure there are those who thank Douglas Preston for fighting for them. Hard to say where the balance of the ledger is.

By Post Author

The funniest part is when she compares writing to software. She says software companies fight all the time to protect their product, which is true, they fight to protect is from thieves. That has NOTHING to do with what she is talking about, writing. Hachette is fighting to force people to buy their books at thier prices, they are trying to say they have the right to force Amazon to sell thier stuff even though they have NO CONTRACT. I have never heard of a software company suing anyone to force them to use their software, at least without a contract. Hachette authors should THANK Amazon for still selling their books at all. Amazon is in the complete right in this, they will not PRE-sell books they have no contract to sell and do not know if they will get the rights to sell them, they will not fill up their warehouses with books they might not be legally allowed to sell next week, would anyone?
Think about it, you take orders for your customers for a million books, you stock another million in your warehouse, but you don’t know if you will be able to sell them next week, you do not have a contract. What happens if Hachette says no more selling, now you have a million books you can’t sell, and a million customers who are unhappy.
Amazon is run by idiots, and so is the Authors Guild. Stupid is what stupid does…

HUGH, when are you going to update this website so we don’t have to hunt down replies to our comments? Most websites will automatically let you know if someone replied to you.
Just saying.
This hunting for replies is cutting into my writing time, lol.

Fight Club is exactly what I was thinking of, too… :)

Particularly, the scene when Ed Norton debates his boss by punching himself in the face over and over again, beating himself bloody while the boss watches in open-mouthed disbelief, because that’s pretty much what Roxana Robinson did here.

I played the video for my ten-year-old daughter to get an unbiased opinion. Her response:
“What that lady is saying doesn’t make any sense.”

From the mouths of babes…

Here is this gifted and lauded author, a professor of writing, a president of an organization of professionals–and she gets so flustered at “special snowflake” she can barely talk straight. What is with that? Has no one EVER confronted her? Has she been coddled and cossetted and back-patted so much she can’t take anything critical? Wow. Life in the idolized author bubble must be delightful if a simple phrase can just get you so upset you can’t lay off saying it. He said special snowflake once. She said it what? More than a half-dozen times.

:-/

She should have plunged on to make her points and ignored the special snowflake remark (no matter how true it is). Just do on and make her points. Although self-contradiction is not the best way to do that.

Notice he was chuckling at one point and I don’t know how he kept a straight face.

Well, yes. She’s a professor. Most of the people she comes in contact with are people she holds significant sway over. People who talk back to her find their grades suffer, or their good favor with her and her cohort suffer in some other way. Nobody argues with her – they kiss her tush.

I, for one, would fair no better than she. It’s hard to say whether this is a lack of experience in a high profile interview, or whether she feels so threatened that her brain is going bonkers. I hope it isn’t the first, because then the AG did a really bad job of picking a president to represent them. My personal opinion is that she doesn’t have enough experience in this sort of situation to overcome her other emotions.

Books aren’t products, eh? Maybe we should just stop paying for them then. We could put them in a museum and pay people 25 bucks to go admire the craftsmanship.

Or I could just get my book from the library so I never have to worry about paying for a something that is very obviously a product.

Great points here. ;)

I posted this over on TPV, and I wanted to share it here, too. I’m currently writing a novel under a pen name, and I wrote this exchange today…And I promise you it will make it to the final draft:

He followed my line of reasoning, and came to the same conclusion. “You’re right, sir. I have to say, you’re pretty smart for a writer!”
“That’s why they call us special snowflakes, Richie,” I replied.

Michael

I’m amazed that this is still going on as the book trade readies itself to head into the Christmas release season.

Watching it all, I know Amazon has taken some hits in this, but none of them are big and I doubt few of them are lasting. That just leaves me wondering when Hachette and Authors United throw it in. I am very curious to see some (hopefully soon) data on Hachette’s market share on Amazon for the current quarter from Author Earnings. Hachette are the ones bleeding.

While the whole kerfuffle might result in a draw, Hachette can’t win, and Amazon can’t lose.

Meanwhile, the average reader still doesn’t even know there is an issue, despite the efforts of Hachette, Preston, AU, Colbert and more.

[…] Ignore the naysayers, for they are on the wrong side of history. The changes taking place have massive and positive implications for writers. Every book you write will be in print for the rest of time. They won’t grow old. They won’t grow dull. They are no longer like razor blades. Every undiscovered book launched today. They will launch every day. New readers will come of age; old readers will rediscover a lost love of reading; the next generation of readers are being born right now. […]

That hurt to watch and Paul is my new hero.

Riddle me this . . .

How come AU loses their heads when books are referred to as “products,” but nobody says a word when Hachette called writers “acquisitions?”

And Roxana, you compare books to software? But, I thought books were the repository of all human knowledge. And there is a distinct difference between copyright and distribution. But, what would you know about copyright, you signed yours away.

Yes, some books transcend being a consumable and become art. Very few. But, you know what? I bought my copy of Grapes of Wrath for a quarter at a garage sale. A story may be priceless, but a book is a product, a consumable, and in the case of James Michener, a brick.

This type of posturing is what sent me over to camp self-pub.

Terri

Had a good laugh watching this, my wife was listening over my shoulder and just shook her head.
Umm, you create something, another company comes in to package and market this something to the public (ie the consumer), who then pays them (and you) money so that they can take this same something with them and enjoy it at home. That could be pizza, beer, car, computer, video game… or booooook. If you trade something you made for money or services, IT… IS… A… PRODUCT! (if we say it slower and louder maybe they will get it, that works, right?). In fact, that pretty much describes every product I’ve heard of in the history of human commerce.

I am a newbie at this, trying to absorb much as I can. Hugh, how you invest your time so freely to enlighten and encourage aspiring (and established) authors is beyond what I could express in gratitude. Your success is an inspiration, your attitude an insight to that success. That with lots of luck, as you modestly claim.

My simple take on this brouhaha is that the “free” market will win the day. A “free-market” place will always be under assault by the current regime whose ox is about to be gored. Protectionism has long roots…because there’s $$$ involved. And the first line of defense is feigned indignation. She pulled that off masterfully.

Anyhoo, Amazon, from what I can tell, seems to offer the best version of a free market for now. Given the opportunity twenty years from now, they will do the same. That’s life.

I really got a kick out of “Snowflake-don’t-you-call-me-snowflake”. Damn that was funny. And yes, nice call, Terrence!

I’m a special snowflake.

I create the culture of the WORLD.

Without my book–no culture would exist!

Only girls wearing hot pants. Only men with mullets.

Big Government, you need to make sure my culture-in-a-box is available everywhere. You need to pass a law saying all retailers must carry my culture books.

ALL retailers must carry my books!

Even if they don’t want them.

Even if they don’t have a contract.

I hired someone to spread my culture. He is a culture spreader. He costs lots of money. It’s his job to get my books in stores. It’s his job to preserve culture. But he says the store is against CULTURE.

He says the store wants to hurt me. Wants to make us all wear hot pants and mullets.

So pass a law. Make the store carry my books!

No more contracts. No more business.

Save our culture! (Except don’t save the culture of the thousands of other authors who don’t use my culture spreader because their culture is crap.)

I am a writer, I have an agent who makes a living on my books I have a publisher that makes seven dollar for every one dollar I make, I need their approval, they call me special, I don’t have the courage to make it on my own, I need a master…
This ironical writing is fun, lol.

[…] We receive fair coverage of many of these trends, but completely busted coverage of what’s happening in the publishing industry. Instead, the New York Times sells $104,000 ads to wealthy authors and gives them in exchange article after article presenting only one side of the issue. It is rare when a member of the media presses with facts, and a disaster for the pro-legacy pundits when they do. […]

Just went to nytimes website and read some stories about the amazon hachette feud. Amazing, the claims hachette makes. So I thought of an analogy… If best buy did not have a contract to sell apple stuff, could apple sue them for not selling apple stuff? And to all those complaining amazon doesn’t have the books in stock, wouldn’t best buy just tell customers to go buy their stuff directly from apple? Isn’t that what Amazon is saying? Oh, wait, hachette can’t deliver their own products, can they? They NEED amazon to do their distribution… So shut up hachette, stop biting the hand that feeds you.

Comments are closed.