Amazon vs Hachette

[fjtorres]

Originally Posted by tubemonkey

Speaking of only getting free books, I just snagged two free audiobooks from Hachette and Harper. I'm not above downloading titles from the Big 5; just as long as they're free.

That reminds me: two of my friends made a point of taking their conspiracy reparations money and spending it *only* on indie titles to make sure none of the money goes back to the BPHs.

[Fbone]

Originally Posted by Barcey

I don't buy from either of them though so I can just watch and laugh.

I noticed that when I sit quietly, doing nothing, the grass still grows.

[fjtorres]

Originally Posted by Fbone

I noticed that when I sit quietly, doing nothing, the grass still grows.

I tried that.
Gave me the creeps so I pulled out my reader.
Doing nothing? Brrrr...

[shalym]

Originally Posted by tubemonkey

I don't read Big 5 books unless they're free

We know.

Shari

[Dopedangel]

By asking for the publisher to bear part of the discounting Amazon will be able to discount other retailers out of business.
For example if say Amazon has discounted a book to $9 and so does another retailer. Amazon might still be making a profit as part of the discount is borne by the publisher where as another retailer won't. Once all the other retailers are run out of business Amazon can then squeeze the publishers for more. The only other alternative for publishers would be to give similar discount to other retailers which would hurt publishers bottom line so they are fighting this.
To me the best option for publishers is to make their own store sell the books and ebooks without drm to customers directly at wholesale prices. But most publishers are to slow to get with the times

[AnemicOak]

Originally Posted by sirmaru

Fiction publishers like Hatchette are not even a consideration for me.

They publish lots of non-fiction too.

[fjtorres]

Originally Posted by Dopedangel

By asking for the publisher to bear part of the discounting Amazon will be able to discount other retailers out of business.

Right now, the angst-fest is because Amazon isn't discounting the titles enough to goose sales to their liking.

So, let's play devil's advocate: why should Amazon spend *their* share of the sale price to boost Hachette sales and make less money themselves to make more money for Hachette? In every other business, promotional price reductions to increase sales are, in fact, shared. When Wal-Mart or BestBuy discounts the $199 XBOX to $149 for a week, they're not cutting the price out of the kindness of their heart to help Microsoft make more money selling XBL subscriptions and games. The do get to sell some accesories at full price and make some money off games but Microsoft chips in part (or all) of the discount to get more XBOXes into living rooms.

Whether it be groceries or electronics, cars or video games, retail promos (whether discounts or preferential placement) always involve at least a partial reduction in the wholesale price by the supplier. That's why its called co-op marketting. With pbooks, unlike XBOXes, there are no accessories for Amazon to make money off after discounting their share of the price so there is no advantage to Amazon to moving more Hachette books instead of somebody else's or their own. They can just as easily put their promo efforts behind other books. Maybe from publishers that *aren't* running PR campaigns demonizing them.

Do note that we don't know why they are fighting because there are no documented specifics, just speculation and name calling. On the other hand, we do know that last year's fight between B&N and S&S (the one that the publishing establishnent tried to keep quiet) *was* over coop marketing.

So, if they are really fighting over coop marketing, all the public handwringing is more than a bit hypocritical.

The only known facts are that two money grubbing multinationals are fighting over how to split the money that isn't going to the creators and that the one pocketing the bigger share is the one trying to pass themselves off as victims. And blocking compensation to the authors.

My heart fair bleeds for them.

[Dopedangel]

Originally Posted by fjtorres

Right now, the angst-fest is because Amazon isn't discounting the titles enough to goose sales to their liking.

So, let's play devil's advocate: why should Amazon spend *their* share of the sale price to boost Hachette sales and make less money themselves to make more money for Hachette? In every other business, promotional price reductions to increase sales are, in fact, shared. When Wal-Mart or BestBuy discounts the $199 XBOX to $149 for a week, they're not cutting the price out of the kindness of their heart to help Microsoft make more money selling XBL subscriptions and games. The do get to sell some accesories at full price and make some money off games but Microsoft chips in part (or all) of the discount to get more XBOXes into living rooms.

Whether it be groceries or electronics, cars or video games, retail promos (whether discounts or preferential placement) always involve at least a partial reduction in the wholesale price by the supplier. That's why its called co-op marketting. With pbooks, unlike XBOXes, there are no accessories for Amazon to make money off after discounting their share of the price so there is no advantage to Amazon to moving more Hachette books instead of somebody else's or their own. They can just as easily put their promo efforts behind other books. Maybe from publishers that *aren't* running PR campaigns demonizing them.

Do note that we don't know why they are fighting because there are no documented specifics, just speculation and name calling. On the other hand, we do know that last year's fight between B&N and S&S (the one that the publishing establishnent tried to keep quiet) *was* over coop marketing.

So, if they are really fighting over coop marketing, all the public handwringing is more than a bit hypocritical.

The only known facts are that two money grubbing multinationals are fighting over how to split the money that isn't going to the creators and that the one pocketing the bigger share is the one trying to pass themselves off as victims. And blocking compensation to the authors.

My heart fair bleeds for them.

Your using of gaming consoles as an example is wrong. Microsoft stands to make more money from more consoles it sells as it makes money from subscriptions and games that are sold for xbox so it is willing to give discounts.
Anyway personally I don't care for Amazon or the publishers. As most outcomes from this standoff point to cheaper books and ebooks for me .

[Alfy]

Originally Posted by Dopedangel

Anyway personally I don't care for Amazon or the publishers. As most outcomes from this standoff point to cheaper books and ebooks for me .

Well, if Hachette wins, I doubt prices will go down. Also, IIRC prices did not go down since the last collusion-based round of negotiations, so we'd probably go back to the pricing ranges of 5 years ago if Amazon wins.

While not a particularly big fan of Amazon, I'm still very much rooting for them in this particular fight. I am amazed how mainstream media (the NYT has been particularly aggravating) and big chunks of the internet heavily criticize Amazon tactics. It's as if collective amnesia has struck, and everybody forgot that the current deals were made on the basis of illegal price fixing methods. So yeah, Hachette gets no sympathy from me.

[Rizla]

Originally Posted by Dopedangel

By asking for the publisher to bear part of the discounting Amazon will be able to discount other retailers out of business.
For example if say Amazon has discounted a book to $9 and so does another retailer. Amazon might still be making a profit as part of the discount is borne by the publisher where as another retailer won't. Once all the other retailers are run out of business Amazon can then squeeze the publishers for more. The only other alternative for publishers would be to give similar discount to other retailers which would hurt publishers bottom line so they are fighting this.
To me the best option for publishers is to make their own store sell the books and ebooks without drm to customers directly at wholesale prices. But most publishers are to slow to get with the times

This is what German publishers did with the Tolino Shine. The difference there is that Amazon didnt already have the market by a strangle-hold. It will be very hard for a competitor to emerge in the American market now.

[Rizla]

Originally Posted by fjtorres

Right now, the angst-fest is because Amazon isn't discounting the titles enough to goose sales to their liking.

So, let's play devil's advocate: why should Amazon spend *their* share of the sale price to boost Hachette sales and make less money themselves to make more money for Hachette? In every other business, promotional price reductions to increase sales are, in fact, shared. When Wal-Mart or BestBuy discounts the $199 XBOX to $149 for a week, they're not cutting the price out of the kindness of their heart to help Microsoft make more money selling XBL subscriptions and games. The do get to sell some accesories at full price and make some money off games but Microsoft chips in part (or all) of the discount to get more XBOXes into living rooms.

Whether it be groceries or electronics, cars or video games, retail promos (whether discounts or preferential placement) always involve at least a partial reduction in the wholesale price by the supplier. That's why its called co-op marketting. With pbooks, unlike XBO.

The only known facts are that two money grubbing multinationals are fighting over how to split the money that isn't going to the creators and that the one pocketing the bigger share is the one trying to pass themselves off as victims. And blocking compensation to the authors.

My heart fair bleeds for them.

Sorry Im late to this thread. Is it true that Hachette pays its authors less than Amazon? Do you know the figures?

[pwalker8]

Most of the time, the company doing the promotion, pays for the promotion. The real question mark is are most the online book orders by True Fans or by Always buy discounted books to use the example earlier. If it's true fans, then Hachette has the leverage because those fans will go to the store that lets them buy their favorite authors. If it's the always buys discounted books, then Amazon has the leverage because those people will wait it out. My understanding is that the vast majority of money comes from the true fans. If that's the case, then Amazon will eventually come to terms.

As far as Amazon waiting for the furor to die down, well that's not the way things work. The real proof of the pudding will be when the next big Hachette book comes out.

[fjtorres]

Originally Posted by Rizla

Sorry Im late to this thread. Is it true that Hachette pays its authors less than Amazon? Do you know the figures?

Depends on the author.
Officially royalties are flat rate, take it or leave it: 17% on hardcovers/ 8%Mmpb, less on "deep-discount" sales to Costco and the like, and 25% of net on ebooks. (Royalty payments, if any, get sent to the Agent, who takes their 15% cut and forwards the rest to the author. Sub-dollar royalties are...not uncommon.)

"Industry standard" contract from every single publisher. No negotiation tolerated by the guardians of culture.
However, not all animals are created equal.
The Steven Kings of the world still get the same royalty rate (on the contract paper) but they get huge "advances against royalties" that both sides know exceed what the official royalty will ever add up to, but which "coincidentally" equals what the expected sales volume would generate at royalty rates of 40-50%. There is a reason why authors refer to it as "selling a manuscript"; for the vast majority of tradpub authors, the "advance" is all the money they ever see.

Amazon is different.
Their tradpub terms actually vary from author to author and thus are kept confidential but the rumor mill pegs their royalties at 35-50%. Most of their authors tend to refer to their Amazon dealings as a "real partnership". Of course, Amazon has the "unfair" advantage that they only publish a few hundred titles a year and they promote the hell out of those titles. And, since they have access to all that juicy consumer data they promote the books to people likely to buy them. As a publisher, amazon is more like Baen than any of the BPHs.
The result is documented at the AUTHOR EARNINGS website: Amazon-published titles take in 10% of the dollars spent on ebooks at Amazon but their authors receive 11% of the dollars received by authors from those sales. The tradpub titles account for 55% of reader spend (as the publishing execs out it) but their authors get only 37% of what gets to all authors.

Now, indie titles are a different beast.
Amazon doesn't pay Indie royalties at all. Zero, zilch.
Amazon *collects* hosting, promotion, and distribution fees from Indie publishers that amount to 30% of the sale price, as long as they are priced at $2.99 to $8.99. (Plus a bandwidth fee based on the size of the ebook that usually adds up to less than 1%.) For titles priced under $2.99 or over $8.99 they charge 50%. (Exceptions exist: For example, Kindle-exclusive titles priced under $2.99 during a COUNTDOWN promo sale only get charged 30%.)
If an Indie title is author-published (most but not all are) the result is that Indie titles account for 20% of the money spent on Kindle ebooks but their authors receive 42% of all the revenue generated at Kindle.

So yes, Amazon publishing pays better (and on a more timely and transparent basis) than other traditional publishers but going Indie pays significantly better than either.

Check out this:
http://authorearnings.com/reports/the-50k-report/

It's a very educational website.

Ditto for this:
http://kriswrites.com/business-rusch....2VqcO8ut.dpbs

The rest of the Business Rusch site is also very good.

[fjtorres]

Originally Posted by pwalker8

. The real proof of the pudding will be when the next big Hachette book comes out.

Probably.

But I would point out the the great windowing experiment of 2009 suggests otherwise. The idea was that holding the ebooks back until the 90-day pbook launch was over because the readers would then either buy print or wait with bated breath. The experiment thudded because readers just bought other books instead of waiting.

Besides, for blockbusters the masses will just go to Walmart like they usually do.
(Won't help the hostages much, though.)
I don't think Bezos would mind seeing Hachette negotiating with Walmart or B&N without Amazon distribution in their pocket.

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.

[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.