Amazon vs Hachette

[eschwartz]

Originally Posted by pwalker8

I would think that the masses buying their blockbusters at Walmart would tend to hurt Amazon rather than Hachette. Hachette gets their money regardless of where customers buy the books. If the books are bought at Walmart, then Amazon doesn't get their cut.

Neither will Hachette if Walmart has them over a barrel.

Walmart will get a REALLY good deal, if they know Hachette needs them. The blockbuster titles are worth a lot, since so many people buy them and Hachette desperately needs to get them out there. But... there are only so many places to put them out. The big two are Amazon and Walmart/supermarkets.

A few months later Hachette may come crying back to Amazon asking for another chance. Amazon has other sources of profit, meanwhile.

[pwalker8]

Yes, I know that Walmart is well known for squeezing suppliers. However, that would be a problem only if this last a period of years. I don't think that Amazon can afford for this sort of thing to go on for a long period of time though. It doesn't take long for customers' loyalties to shift.

[tubemonkey]

Originally Posted by fjtorres

Anyway, doubt the PR campaign will last that long, though. They're already playing the "Amazon is bad for democracy" card so the Godwin line is near.

[tubemonkey]

Originally Posted by pwalker8

Yes, I know that Walmart is well known for squeezing suppliers. However, that would be a problem only if this last a period of years. I don't think that Amazon can afford for this sort of thing to go on for a long period of time though. It doesn't take long for customers' loyalties to shift.

Amazon can afford to wait. Book sales only account for 20% of their business; and Hachette is a fraction of that total. Hachette is the one who should worry.

[pwalker8]

That may be what a bean counter would say. However, Amazon's success is largely based on customer service and trust. It really doesn't take very long for a brand to be damaged.

[Alfy]

Third opinion piece this week in the NYT, all of them resolutely anti-Amazon: http://www.nytimes.com/2014/05/31/op...azon.html?_r=0

Getting really tired of it, especially the way they just wave away publishers price-fixing...

[pwalker8]

Well, they say that when everyone disagrees with you, then maybe you should stop and think about it. Perhaps they wave it away because it didn't actually happen. Price fixing is when a specific price is set. What the publishers were accused of was getting together and telling Amazon that each of the publishers wanted the ability to set their own price in a model know as agency pricing. A model that is actually quite legal. Price fixing is not legal.

[DiapDealer]

While it's not exactly pro-Amazon, this article at least places a lot of the blame for this current situation squarely where it belongs.

http://www.slate.com/articles/techno...urce=pulsenews

[Connallmac]

Originally Posted by DiapDealer

While it's not exactly pro-Amazon, this article at least places a lot of the blame for this current situation squarely where it belongs.

Of course this author seems to think that Diet Coke is actually produced in some sort of alternate universe where market forces don't apply, so take it all with a grain of salt.

[DiapDealer]

Originally Posted by Connallmac

Of course this author seems to think that Diet Coke is actually produced in some sort of alternate universe where market forces don't apply, so take it all with a grain of salt.

I think you missed the point. The author never claimed that market forces don't apply to Diet Coke. But rather, that those market forces (that definitely do apply) aren't going to change the product itself. While I may not agree that the content and quality of books themselves may suffer as a result of this battle, I find the analogy quite apt. The market forces in this instance do have the potential to change the quality and the content of the product itself. Whether or not they will is another story. The big point is that this isn't simply a two-sided battle between retailer and supplier (as I was once willing to see it myself).

But the main thing I took away from the article isn't that books are different than Diet Coke. It's that Hachette (and other publishers) could have protected themselves from Amazon had they chosen to re-distribute the disparate margins (that ebooks offered over their print counterparts) in the form of increased author royalties. Now it's probably too late to do so. And rather than reaping the benefits that a larger, happier (and very likely more prestigious) stable of authors would have provided them, they're going to have to hand over those margins to Amazon ... all because of short-sightedness (which they seem to have in abundance).

[fjtorres]

Originally Posted by Alfy

Third opinion piece this week in the NYT, all of them resolutely anti-Amazon: http://www.nytimes.com/2014/05/31/op...azon.html?_r=0

Getting really tired of it, especially the way they just wave away publishers price-fixing...

Conspiracy to fix prices, yes. They handwave it away.

They handwave away that the reason Amazon has so much power over distribution is because the Manhattan gang has over the last 40 years concentrated their distribution into a handful of big accounts: B&N, Borders, Ingram, Baker&Taylor, Walmart, Costco... and Amazon.
Then, when Borders got into trouble through mismanagement and wanted to reorganize, the BPHs refused and forced thm into liquidation. They even refused to coooerate when prospective buyers tried to keep part of Borders alive. They thought the business would go to B&N, which was also shaky. Instead, 75% of th Borders business predictably went to Amazon . (Predictably: 75% of Borders's sites were within a mile of a B&N, so anybody shopping at Borders was doing it despite B&N being at hand. You'd expect them to still go elsewhere.)

The media handwaves away the exploitation of tradpub authors (many of whom are burning away their credibility with readers in joining the anti-Amazon screeds).

And the media handwaves away the fact that they have vested economic and political interests in the fight, all on the publishers side. Because they too are publishers, they too are facing hard times and potential extinction because of customers going to digital. And because the traditional, incestuous community they've built is crumbling.

Who owns S&S? CBS.
Who owns HC? News Corp.
How many reporters and columnists in the NYC media routinely supplement their income with cozy book deals with their friends from down the street? Easier to list those that don't.
Think they are going to tsk-tsk Hachette for picking a fight with no leverage?
Nope.
To the streets! Man the barricades!

Once upon a time NYC media controlled the facts the masses saw. "The paper of record", remember. They chose which presidents to cover for and which ones to vilify and bring down. Then the internet and Google and Wikioedia and what-not came along and people could find facts on their own, on demand and the power declined. They sued Google. And lost.
They consoled themselves they still had control over spin, their columns and pundits were the go-to authorities on how to interpret facts. Then the internet brought blogs and discussion forums and people learned to weigh opinions and make up their own minds, to see past spin and astroturf campaigns.
They consoled themselves that blogs were transitory and only online and that they controlled print and books which are permanent; they controlled history and literature! And the damned internet coughed up ebooks and, worse, made indie publishing respectable.

Suddenly, publishers (hachette, in fact) had to explain why they were relevant at all. And not doing a good job of it, either:

http://jakonrath.blogspot.com/2011/1...-hachette.html

Suddenly, books they and their buddies had sneered at were raking in money left and right and they had to pay unknowns millions to get a piece of the pie before people noticed they weren't indispensable. They found themselves rushing out me-too titles in genres they had no hand in defining. They found themselves reacting, out of control.

The Hachette amazon spat isn't the beginning of anything: it is the climax of a crisis 20 years in the making as the internet undercuts the power of the corporate media giants and they are, again, closing ranks and trying to spin the debate their way.

Everything the big media mafia says about Amazon they said about Google; everything they say about indie books, they said about blogs. In lockstep, as usual.

They just gave us this:

http://www.thebookseller.com/news/bo...ded-power.html

...and this:

http://www.theguardian.com/books/boo...rpreneurialism

Seriously, they are overplaying their hand. They're only making themselves look foolish once the dust settles and nothing significant changes.

They should have stayed quiet and not expose their own fear and loathing of the new world. Cause change is coming no matter what, regardless of what happens in the te a pot tempest of Hachette vs Amazon.

[fjtorres]

Originally Posted by DiapDealer

But the main thing I took away from the article isn't that books are different than Diet Coke. It's that Hachette (and other publishers) could have protected themselves from Amazon had they chosen to re-distribute the disparate margins (that ebooks offered over their print counterparts) in the form of increased author royalties. Now it's probably too late to do so. And rather than reaping the benefits that a larger, happier (and very likely more prestigious) stable of authors would have provided them, they're going to have to hand over those margins to Amazon ... all because of short-sightedness (which they seem to have in abundance).

You nailed it.
Behind over the smokescreen of "Amazon extortion" is the angst that the NYC corporate publishers are becoming irrelevant (worse, unnecessary) to the author--relationship.

They created the whole system of ever-declining payday loans and miniscule royalties where they see great financial reports every quarter while most of their authors see zilch, where Hachette authors with 20 and 40 title backlists fret that without Amazon pre-order buttons they won't make mortgage money. (I'm... skeptical... But I haven't checked to see how many of their titles hachette has in print and how many they're squatting on.)

Amazon's real crime against publishing isn't discounting or demanding co-payments for the services they provide to publishers; it is fostering the emergence of a reputable indie publishing industry where midlist authors can and do make mortgage money without 40-title backlists and pre-order buttons, and where many, after only two-three years are in fact quitting the day job.

Amazon KDP is the real threat: it not only made indie titles respectable, it forced other ebook vendors to start their own indiepub systems (Nook, Kobo) or at a minimum partner with aggregator front-ends like Smashwords (Apple, Google, Tolino?).

When your author contracts are so bad, any viable alternative is an existential threat to their business model, though not the company. But rather than face the upstream threat (which owes a lot of its momentum to the conspiracy--they created the environment for indies to prosper) they choose to attack and cripple their own downstream distribution system.

They're angry at Amazon.
We all get it by know.
(Never mind that Amazon only pivoted towards indies in response to the conspiracy.)

But if they don't deal with their upstream problem fast, pretty soon they won't have much of a downstream problem. They'll survive just fine off Patterson and their backlist rights but without new authors they'll all just end up merged into the randy penguin.

The longer this hissy fit goes on, the more tradpub authors will start to question why they aren't at least experimenting with indie releases. And once they see how that plays out...

Odds are their fight with Amazon is about a few odd percentage points. Well, keeping their authors once they taste hybrid publushing is going to cost them 20-25 points... Or lead to something far worse: time-limited contracts.

Wrong fight, wrong time.

Edit: here's one of many lists online of authors willing to talk about their (modest, mostly) success enabling them to move to full time writing:
http://www.thepassivevoice.com/05/20...heir-day-jobs/

These aren't Patterson-class multimillionaires but rather cottage industry entrepreneurs making a living at what they love.

[fjtorres]

We need to set up a game: How evil is Amazon?

Here's today's evil Amazon entry, courtesy of Salon. Not only is Amazon bad for literature and bad for democracy, they are totally ruining the dating scene in Seattle:

http://www.salon.com/2014/05/30/amaz..._life_partner/

Maybe the PR campaign is starting to run out of sins?

[pwalker8]

Originally Posted by DiapDealer

...

But the main thing I took away from the article isn't that books are different than Diet Coke. It's that Hachette (and other publishers) could have protected themselves from Amazon had they chosen to re-distribute the disparate margins (that ebooks offered over their print counterparts) in the form of increased author royalties. Now it's probably too late to do so. And rather than reaping the benefits that a larger, happier (and very likely more prestigious) stable of authors would have provided them, they're going to have to hand over those margins to Amazon ... all because of short-sightedness (which they seem to have in abundance).

I seriously doubt that the publisher could have protected themselves from Amazon by giving increased author royalties. The fight between Amazon and the various publishers have very little to do with the authors per se. While Amazon does provide authors with more leverage with the publishers (especially the established mid-list authors with good name recognition), the publisher/author relationship is much more complex.

Take a look at how the music industry has changed since iTunes made downloadable music more than just a niche market. When iTunes took off, many people predicted that record companies would go away and artists would deal with their fans directly and keep all that money that the record companies were skimming off the record sales. After all, the cost of a recording studio dropped dramatically and you could just publish directly on iTunes using youTube as a marketing device.

It didn't quite work out that way. The big four are still going strong and there are now thousands of so called independent labels out that. Heck, Atlanta, GA has listings for 79 labels locally. Sure, some artists are purely independent, but most want to make music, not all the grunt work needed to produce an album and market it.

The need for editing and marketing hasn't gone away. It very well may be that the consolidation of the big publishing companies reverses and we see a proliferation of smaller, more narrowly focused publishing companies. The demand for dead tree books isn't going to go away any time in the near future. While I'm sure there will be purely independent writers who make a good living, I think they will be the exception to the rule rather than the rule (much like the authors who become wealthy are the exception rather than the rule).

[pwalker8]

Originally Posted by fjtorres

We need to set up a game: How evil is Amazon?

Here's today's evil Amazon entry, courtesy of Salon. Not only is Amazon bad for literature and bad for democracy, they are totally ruining the dating scene in Seattle:

http://www.salon.com/2014/05/30/amaz..._life_partner/

Maybe the PR campaign is starting to run out of sins?

Or maybe we can stop lashing out in emotional tirades when the narrative that we hold so dear turns out to be not so well rooted in reality.