Latest Authors United letter to Amazon Board

[darryl]

Originally Posted by SteveEisenberg

I can't resist mentioning that, on this forum, I scooped the New York Times, by more than an month, concerning the special snowflake treatment Amazon has accorded Paul Ryan. See:

https://www.mobileread.com/forums/sho...&postcount=542

Most politicians think they are special snowflakes. Sometimes prudence dictates a departure from a particular policy. In fact, government administrators who apply a blanket policy blindly without considering the circumstances of a particular case can have their decision quashed by the Courts. Yes, it is hypocritical. Yes, he should not receive any specail treatment because of his position. But it is a case of prudence won out, as it usually does. Welcome to the real world. Where, by the way, Hachette authors are not special snowflakes.

[fjtorres]

Originally Posted by darryl

Welcome to the real world. Where, by the way, Hachette authors are not special snowflakes.

...but the guy who might be the next President is.

After the Microsoft antitrust trial, most tech companies make sure to keep top politicians on both sides happy. Good insurance.

[darryl]

Originally Posted by fjtorres

...but the guy who might be the next President is.

And not because of his loneliness or his quirky brain either. It is good insurance, as you point out.

Originally Posted by fjtorres

After the Microsoft antitrust trial, most tech companies make sure to keep top politicians on both sides happy. Good insurance.

Very true. This is what it takes to get special snowflake status in the real world. Sad perhaps, but true.

[SteveEisenberg]

Originally Posted by darryl

Where, by the way, Hachette authors are not special snowflakes.

Not to you, but maybe to Jeff Bezos. Otherwise, why is he still selling any Hachette books, other than those (ghost)written by politicians? When in dispute with Apple, Amazon doesn't keep on selling Apple products (except through third-party vendors). So why the kinder treatment of big publishing?

Bezos won't go too far. And not just because he feels it would be wrong, but also because he likes to buy the company of top major publishers authors for his annual Campfire shindig. I know he did invite indie author Hugh Howey, even after Howey said he didn't want to go. This could be the exception that proves the rule concerning who is getting special treatment. I wish someone would leak the 2014 Campfire invite list.

[bgalbrecht]

Originally Posted by SteveEisenberg

Not to you, but maybe to Jeff Bezos. Otherwise, why is he still selling any Hachette books, other than those (ghost)written by politicians? When in dispute with Apple, Amazon doesn't keep on selling Apple products (except through third-party vendors). So why the kinder treatment of big publishing?

Perhaps Amazon has lawyers who advise the company on what is likely to trigger an anti-trust lawsuit, and not selling Hatchette books at all is more likely to trigger one than their current behaviour? As the anti-Amazon folks keep telling us, Amazon has a natural monopoly in the book selling business which can (or should) limit certain actions on their part, and they don't have a natural monopoly with the categories of products sold by Apple.

[darryl]

Originally Posted by SteveEisenberg

Not to you, but maybe to Jeff Bezos. Otherwise, why is he still selling any Hachette books, other than those (ghost)written by politicians? When in dispute with Apple, Amazon doesn't keep on selling Apple products (except through third-party vendors). So why the kinder treatment of big publishing?

Why on earth would Amazon want to do that? They are still making money off Hachette books, though perhaps not as much as before if the AU letter is to be believed. One could equally ask why Hachette continues to supply Amazon. Amazon does not want to stop selling Hachette books, but if they do for whatever reason it is likely that Hachette will suffer far worse than Amazon.

Originally Posted by SteveEisenberg

Bezos won't go too far. And not just because he feels it would be wrong, but also because he likes to buy the company of top major publishers authors for his annual Campfire shindig. I know he did invite indie author Hugh Howey, even after Howey said he didn't want to go. This could be the exception that proves the rule concerning who is getting special treatment. I wish someone would leak the 2014 Campfire invite list.

So Jeff Bezos is so infatuated with the likes of Doug Preston that he lets it influence major Amazon business decisions? Are you serious? Please think about what you are saying!

[Sydney's Mom]

Originally Posted by shalym

But see, I would bet that Overdrive (and thus, the libraries) have some sort of a contract with Hachette (and other publishers) so that they can guarantee that the book will be available upon publication. Amazon doesn't have that with Hachette.

Shari

And I am sure Overdrive charges my library for that. Every book I have on hold is a preorder.

You aren't going to get me to compare a library with a for-profit company. But I will compare Amazon's "lists" with bookstore product placement. About as useful as the library's Most Popular Collection. I discuss books with my friends, watch the shows the authors go on (Mahr, Colbert), read book reviews in Chicago Tribune, NYT and Wall Street Journal. The last time I bought a book just because it was on a bestseller list was 50 Shades of Gray, and DON'T get me started on that piece of cr*p. I'm currently reading A Presumption of Guilt by Charles Olgletree, and I learned about that through an alumni mailing. I have NEVER paid any attention to Amazon's book recommendations, except to check out if that book is available at the library, because I certainly wouldn't buy a book based on any for-profit company recommendation.

I realize this makes it really hard for independent authors to get their voice heard. But this is not due to any failure on my part, it is due to the historical position of publishers as gatekeepers.

Amazon is not a special snowflake. But between Hatchette and Amazon--Amazon wants to bring more books in front of me, Hatchette wants to restrict the books I see. Amazon wants to sell more at a lower price, Hatchette wants to charge me more. Arguments on worth are useless--what is the right price? Is Ogletree worth less because I borrowed it from the library? All I do know is I cannot loan or resell or donate ebooks. So they should be quite a bit less than pbooks. I don't know what the thought process was behind releasing ebooks at the same time as hardcovers. I am sure Amazon wanted it, to create interest for the kindle. But what did the publishers think was going to happen when they released two competing products at the same time? They must have been betting ebooks would fail. But they didn't count on Amazon and Oprah.

[fjtorres]

Originally Posted by Sydney's Mom

But between Hatchette and Amazon--Amazon wants to bring more books in front of me, Hatchette wants to restrict the books I see. Amazon wants to sell more at a lower price, Hatchette wants to charge me more. Arguments on worth are useless--what is the right price? Is Ogletree worth less because I borrowed it from the library? All I do know is I cannot loan or resell or donate ebooks. So they should be quite a bit less than pbooks. I don't know what the thought process was behind releasing ebooks at the same time as hardcovers. I am sure Amazon wanted it, to create interest for the kindle. But what did the publishers think was going to happen when they released two competing products at the same time? They must have been betting ebooks would fail. But they didn't count on Amazon and Oprah.

Oprah really freaked them out.
What they were thinking was that ebooks would forever be a niche for techies and enthusiasts, like many European markets still are (low single digit penetration). Then, suddenly Oprah gave Kindle mainstream visibility and a boost to ebook sales.
Panic set in.
After that it has been one mistep after another.

[darryl]

Sydney's Mom. Yes. The BWM did not really see it as being within their interest for ebooks to succeed. They had never succeeded in the past. Prices were very high so as not to take sales away from print books. This is still the business model that they would seem to prefer. You are quite right that the decision to release ebooks at the same time as the premium priced hardcovers makes no sense if you are a publisher who is seeking to preserve your print book business. However, for Amazon and others without a strong interest in preserving that print book business it is in their interests to get ebooks to customers as soon as possible. I doubt the difference in the margins for the retailers are that much different between the two in any event.

I think this is one of the big problems that the BWM have had. Instead of embracing ebooks they have sought to retard their growth to preserve their print book business, and have basically been dragged kicking and screaming into the current century in almost every respect. A significant respect which I think will do them increasing harm is the pricing of ebooks by reference to print book prices. KDP and indeed most Indie and "self-published" ebooks are priced significantly lower, which I think is the reality. As you point out, ebooks can't be loaned or resold or donated (except for some very limited exceptions). They are also significantly less expensive to produce.

[fjtorres]

Originally Posted by darryl

A significant respect which I think will do them increasing harm is the pricing of ebooks by reference to print book prices. KDP and indeed most Indie and "self-published" ebooks are priced significantly lower, which I think is the reality. As you point out, ebooks can't be loaned or resold or donated (except for some very limited exceptions). They are also significantly less expensive to produce.

A common practice for Indies is to list a POD trade paperback print edition next to thd ebook price to make their ebook price look like a much better deal. I.E., a print book listed at typical agency ebook price of $13 and an ebook listed af $4.99. This gives them a twofer: they can claim their pbook costs what the BPHs charge for ebooks, and they claim their ebook is an even better deal.

Most indies think of their print editions as their Christmas Gifting edition.

[BookAdmin]

Well, to be honest I think the authors should take the lion's share of book sales.
If you do a quick calculation:
Suppose that Amazon takes 30% commission (as when an individual puts his book on the Kindle store).
The publisher takes 30%, there will be only 40% for authors, who still provides the raw material of the book ...
If Hachette fights as they claim to increase the authors share, I think it's a good thing. But if it is to make even more profit, that's not cool for authors ...

[SteveEisenberg]

Originally Posted by BookAdmin

Well, to be honest I think the authors should take the lion's share of book sales.

If the author did all the work, as in Kindle Direct Publishing, except for editing that was paid for out of the author's 30 percent, definitely.

In the case of a ghostwritten political book, or a textbook primarily written by publishing company editors despite a listed famous author, no.

What about fiction trade books? A lot fall in the middle. At a talk by long-term police procedural novelist Archer Mayor last year, I understood him to say that, nowadays, he sends his publisher books that need little additional editing, but it used to be different. Should they increase his advances, or otherwise improve his contract, because of that? Maybe, but I wouldn't want the author to be a position of being reluctant to accept heavy editing because he or she thought it would harm contract terms.

If Hachette fights as they claim to increase the authors share, I think it's a good thing. But if it is to make even more profit, that's not cool for authors ...

Hachette parent Lagardere Publishering made roughly €1.3 billion last year, on €7.2 billion in sales. While not what some tech companies achieve, that is a whole lot. But in 2011, they lost about €700 million. And their profits in 2009, 2010, and 2012 were a small fraction of sales, and of the 2013 windfall. To see, scroll to the bottom here to the Financials section, and click on ANNUAL.

http://quotes.wsj.com/FR/MMB

As a reader, I favor giving authors higher income, but mostly in the form of advances, and assistance in improving their books, rather than royalties. It's the advance that funds author research, and then provide maximum incentive to complete the book behind the book proposal.

I don't think a publisher like Hachette can ever come close to a minimal-service outfit like Kindle Direct Publishing on the royalty rate, nor should they try. The publisher that cares about authors should be taking most risk on itself, as it does with substantial advances, rather than putting the risk on authors, as happens when royalties are a big part of the package.

Besides paying more advances, and better public library cooperation, I side with Hachette, as a publisher, over Amazon, as a publisher, because Hachette does more to make the books better.

[DuckieTigger]

Steve, who do you think pays the advances back? If Hachette increases the royalty percent for the author, then Hachette would recover that money back so much faster. If they pay out advances with money they don't have in the hope of getting it back, then they are doing it wrong. It is pretty risk free if they only pay out advances with money that is already profit. If they can't make the advance back (the book flopped) they did not lose any money, they made less profit. Also with higher royalties the book is more likely a success - as it takes fewer copies of the book until the author paid back the advance. The author doesn't get any royalties until the advance is paid back.

[pwalker8]

Originally Posted by DuckieTigger

Steve, who do you think pays the advances back? If Hachette increases the royalty percent for the author, then Hachette would recover that money back so much faster. If they pay out advances with money they don't have in the hope of getting it back, then they are doing it wrong. It is pretty risk free if they only pay out advances with money that is already profit. If they can't make the advance back (the book flopped) they did not lose any money, they made less profit. Also with higher royalties the book is more likely a success - as it takes fewer copies of the book until the author paid back the advance. The author doesn't get any royalties until the advance is paid back.

Who do you think eats the difference when a book doesn't pay out (i.e. make enough to cover the advance)?

If an author wants to write as an indie and take Amazon's deal, then they can. If they want to work with a main stream publisher, rather than take Amazon's deal, they can. What's so hard about that? Competition is all about having options.

[fjtorres]

Originally Posted by pwalker8

Who do you think eats the difference when a book doesn't pay out (i.e. make enough to cover the advance)?

Minor point of fact: just because a book doesn't earn out doesn't mean the publisher loses money on it. In fact, with the big name authors they purposefully write contracts that never earn out at the nominal royalty rate but rake in millions in net profits. Earning out is not the breakeven point for the publisher; that is generally way lower. Earning out is simply the point at which a book contract effectively becomes a license instead of a lump sum sale.

If the BPHs were losing money on all the titles that don't earn out they would've stopped publishing midlisters. Midlist authors themselves may not make much money individually but the publishers make at least some money on each book and since they put them out by the thousands (12-14000 in 2014 for the randy penguin) it quickly adds up.

Here:
http://www.stevenpressfield.com/2014...-a-good-thing/

So the bottom line for the publisher is gross revenue of $16,550,000 minus the $5,000,000 guarantee to Ms. Bestselling Writer, minus the $2,800,000 to print and ship the physical books. Or a total of $8,750,000 ($16,550,000 – $5,000,000 – $2,800,000) to their bottom line.

Even though the book never “earned out.”