Stephen Black commenting on Amazon commenting on Hachette

I was sent the following  email, which also appeared  at www.readersunited.com.  I think the letter is important and worth sharing, so I posted it here, then realized that the SEO gods might not like me reposting it in its entirety. So… I have added my own thoughts, in green…

(FWIW, I’ve written  three part post on my experiences with emails. The first post is here.)

A Message from the Amazon Books Team, with very serious and greatly insightful and truly important notes by an indy/KDP author

Dear Readers,

Just ahead of World War II, there was a radical invention that shook the foundations of book publishing.This is a great opening line… no one can question it. It was the paperback book. The greatness answers its own question...This was a time when movie tickets cost 10 or 20 cents, and books cost $2.50. More undebatable facts. The new paperback cost 25 cents — it was ten times cheaper. Fact!Readers loved the paperback and millions of copies were sold in just the first year. BOOM… Logical conclusion!

With it being so inexpensive and with so many more people able to afford to buy and read books, you would think the literary establishment of the day would have celebrated the invention of the paperback, yes? Why yes, you would!Nope. No?Instead, they dug in and circled the wagons. Great writing… “circled the wagons” suggests the pioneer spirit. Independence. “Edginess” and cowboy hats! They believed low cost paperbacks would destroy literary culture and harm the industry (not to mention their own bank accounts) .Excellent use of foreshadowing! Many bookstores refused to stock them, and the early paperback publishers had to use unconventional methods of distribution — places like newsstands and drugstores. Again, history…can’t argue about that.The famous author George Orwell came out publicly and said about the new paperback format, if “publishers had any sense, they would combine against them and suppress them.” And on top of everything else, well-researched. Yes, George Orwell was suggesting collusion. I wonder why George thought that way? ( A day later…Thanks to David Streitfeld at the New York Times, we now know that Orwell was misquoted and Amazon shot themselves in the foot.)Aaaargh! I write this on Sept. 4, 2014….it seems that the NY Times piece was, in turn, questioned. There are also a few web posts on how the “penny dreadfuls” and other cheaply published materials preceded paperbacks… Unfortunately, I didn’t think to record these links… 

Well… history doesn’t repeat itself, but it does rhyme. Hmmmm… blistery? mystery?… I don’t get it.

Fast forward to today, and it’s the e-book’s turn to be opposed by the literary establishment. Note the article spells the word as ‘e-books’, as opposed to ‘ebooks’. Amazon and Hachette — a big US publisher and part of a $10 billion media conglomerate — are in the middle of a business dispute about e-books. Here we go; the heart of the matter.We want lower e-book prices. Hachette does not. BOOM! Many e-books are being released at $14.99 and even $19.99. This fact alone does not impress me. Many bottles of wine sell for $500….should they be in the same section as Two Buck Chuck? That is unjustifiably high for an e-book. Unjustifiably high for SOME ebooks… With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market — e-books cannot be resold as used books. These are all seemingly valid points…BUT IGNORE THE COST OF PRODUCING THE BOOK. AND PUBLICITY. AND PROMOTION…I am not drinking the Big 5 Kool-Aid here, but books/ebooks are not manufactured like automotive components, or products with a waiting market. One could say that the need for books has to be created. What is the cost of creating that need?  E-books can and should be less expensive. Yes, but…

Perhaps channeling Orwell’s decades old suggestion, Hachette has already been caught illegally colluding with its competitors to raise e-book prices. Superb structure and follow through here….I wish there was a name at the end of this document instead of The Amazon Books Team.  So far those parties have paid $166 million in penalties and restitution.  I thought I smelled expensive cologne, the kind that successful lawyers wear. Colluding with its competitors to raise prices wasn’t only illegal, it was also highly disrespectful to Hachette’s readers. Take that Hachette! Ten percent legalese, ninety percent emotional knockout punch!Hachette dissed you!

The fact is many established incumbents in the industry have taken the position that lower e-book prices will “devalue books” and hurt “Arts and Letters.” Excellent set up…. and the payoff: They’re wrong. BOOM! Just as paperbacks did not destroy book culture despite being ten times cheaper, neither will e-books. Now you’re talkin’…except for the part about who builds demand for books in this day and age. Before it was only books/paperbacks versus movies, newspapers and drinkin’ at the bar… On the contrary, paperbacks ended up rejuvenating the book industry and making it stronger. Yep…sure was nice not to have to compete with mobile devices. And games. And Facebook. And a zillion other things…The same will happen with e-books. As long as someone pays for the marketing. And it would be swell if that marketing wasn’t for just a few blockbusters. How many paperback publishers were there in Orwell’s day? How many indy publishers are there now?

Many inside the echo-chamber of the industry often draw the box too small. Echo chamber/drawing the box…! Like it! More polite than saying they have their head up their gazebo. They think books only compete against books. They are silly, aren’t they? But in reality, books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. Now you’re talkin’!Reality! If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.And a bigger part of that is to encourage authors to spend their time writing as opposed to pounding their head against the wall wondering about how to market.You want the book market to be like Hollywood, where nearly everything is formulaic and/or derivative? That is to say, safe and boring? Reading and writing are supposed to be about thinking, not commodification. How do we build communities of thinkers/those with similar interests/fans? The closer you get to 99 cents, the more you’ll find cookie cutter/”brand name” detectives or porn or cardboard “romances”. (Speaking of “brand name detectives”, I’m looking at you, Verry Larch.

I digress. 

The Amazon letter mentions a “healthy reading culture”…. Just as a diversity of food is important to a healthy diet, a diversity of books is important to a healthy reading culture. Just think about how a great book by an unknown will compete with a brand name author…Yes, life is tough, but again… why doesn’t Amazon address the fact that it makes most of its money off of the same old same old, books that are either “built” by big publishers or by indies who often combine formulaic storytelling with  full on marketing. I greatly respect the indies who do well on Amazon, but what about those writers who could contribute to a healthy reading culture, but cannot do marketing nor tie in with a publisher? How do authors who exemplify  diversity get paid?

Moreover, e-books are highly price elastic. Great, pass the pen share the document between the legal eagles and the bean counters. This means that when the price goes down, customers buy much more. Excellent…but how do these customers learn about the book?Who builds that demand? Who invests the time and money? I know I am repeating myself and will now stop belaboring this major point…We’ve quantified the price elasticity of e-books from repeated measurements across many titles. “Quantified” is an excellent verb, and no I am not being sarcastic. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. Ah….So your research was based on the giant redwoods that flourish in your healthy reading environment. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Great! Of all of Amazon’s books, what percentage are priced at $14.99? Total revenue at $14.99 would be $1,499,000.This letter was written by what members of The Amazon Books Team? Total revenue at $9.99 is $1,738,000. Seems like today the Team is focused on the revenue side of books. Maybe tomorrow the A B Team will address the other percentage of books that don’t sell for $14.99 and could, most likely,  improve Amazon’s bottom line. The important thing to note here is that the lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. “all parties involved”….except for the majority of authors on Amazon who do not have books with a $14.99 price tag. The pie is simply bigger. In this case, Hachette makes the pies, Amazon sells them… So, a Hachette pie or a famous author pie is $9.99…Amazon still makes a ton of money. Great! So, Amazon,could you also put the same amount of effort and concern into explaining how an author can make money for you/stay financially healthy by pricing his or her book at $2.99?

But when a thing has been done a certain way for a long time, resisting change can be a reflexive instinct, and the powerful interests of the status quo are hard to move. Classic three-act structure. Resolution. Superbly written, Amazon… It was never in George Orwell’s interest to suppress paperback books — he was wrong about that. Bookending with Orwell. Class.Though the NY Times says you kinda twisted his words… greatly.

And despite what some would have you believe, authors are not united on this issue. Part  II begins!When the Authors Guild recently wrote on this, they titled their post: “Amazon-Hachette Debate Yields Diverse Opinions Among Authors” (the comments to this post are worth a read).  Excellent debating technique…quoting a reputable third party. I love this letter! So much better than fat-headed rants by loudmouth know-it-alls! A petition started by another group of authors and aimed at Hachette, titled “Stop Fighting Low Prices and Fair Wages,” garnered over 7,600 signatures. So there ya go Hachette… listen to your inner voices. And there are myriad articles and posts, by authors and readers alike, supporting us in our effort to keep prices low and build a healthy reading culture. Boom!Author David Gaughran’s recent interview is another piece worth reading. So there ya go… ya got yer Authors Guild, ya got yer petition thing, ya got yer myriad articles and posts… all for that “healthy reading culture.”

We recognize that writers reasonably want to be left out of a dispute between large companies. Thank you for recognizing that. Some have suggested that we “just talk.” Some have suggested mud wrestling in front of an invited audience that reflects Amazon’s author demographics. We tried that.I guess you mean talking, not mud wrestling. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. WOAH! You took actions to reduce their sales? I heard about that… I guess that was fair, right? It’s your store! You’re gonna be Ten Buck Chuck or we won’t sell your book! Since then Amazon has made three separate offers to Hachette to take authors out of the middle. Hmmm… I am too tired to Google and comment wittily. Not  that that fact is stopping me now… We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Wow! You sell books and offer to help publishers decide royalties…Then we suggested that authors receive 100% of all sales of their titles until this dispute is resolved. Another great suggestion. Then we suggested that we would return to normal business operations if Amazon and Hachette’s normal share of revenue went to a literacy charity.You are too kind! But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though e-books represent 1% of their revenues and they could easily agree to do so. I don’t do marketing for my books, nor do I have much business sense. So, I am kind of out of the loop here… Is it normal for a store to dictate terms to the manufacturers of the products the store sells? What is this thing that they call a “slippery slope”?  They believe they get leverage from keeping their authors in the middle. Sorry AB Team, this concluding sentence is the weakest line so far…

We will never give up our fight for reasonable e-book prices. Hand goes up in the back: How about also fighting for ways to promote diversity as well as recognizing that the vast majority of books being offered on Amazon are not the result of the Big 5 nor authors-turned marketing/social media geniuses.  We know making books more affordable is good for book culture. Book culture?We’d like your help. I hope that me having fun with your letter helps keep Amazon healthy, as well as increases awareness that better book discovery and more diversity are needed to have a truly healthy book culture. Please email Hachette and copy us.Whatever you say, chief!

Hachette CEO, Michael Pietsch: Michael.Pietsch@hbgusa.com

Yep, great idea adding your photo, Amazon Book Team…
Copy us at: readers-united@amazon.com

… makes it easier to remember a name when you have a face.

Please consider including these points:

  • We have noted your illegal collusion. Yep!Please stop working so hard to overcharge for ebooks. Maybe they are just being lazy? Have you considered that?They can and should be less expensive.Amen, goshdarnit!
  • Lowering e-book prices will help — not hurt — the reading culture, just like paperbacks did.You betcha! Seriously Amazon, be careful when you use words like”reading culture”… Let’s not kid ourselves. How about some examples of how you support “reading culture”?Again, I am not being sarcastic… 
  • Stop using your authors as leverage and accept one of Amazon’s offers to take them out of the middle. Again, I am unclear as to why Amazon is giving ultimatums to another company.Whether Hachette is doing the right thing or not, isn’t that their business? Literally?
  • Especially if you’re an author yourself: Remind them that authors are not united on this issue. Amazon, I kinda love you and kinda dislike you strongly…

Thanks for your support. Thanks for being Amazon.

The Amazon Books Team

Hey, Amazon Books Team! That was fun! I enjoyed it. Waddya say we go grab something to eat? Table for six? Sixty? 

So…My books

Obama Search Words (Yes, this is about the President of the United States)

Furikake (the worst cover on Amazon? You betcha!)

Contact With Shadow  (it’s coming unglued!)

I Ate Tiong Bahru (a lady in France likes it!) (get an ebook version free!)

Bali Wave Ghost

I am not doing serious marketing until I have eight books completed. Marketing for indie authors and book discovery channels are improving every day but for me,  it is not yet worthwhile to put the time and energy into trying to sell less than eight books.

SPOKEN is a project combing virtual reality, art and creative writing. It premiers September 17… Some of the artists and writers involved are world-famous…

Further Reading

  1. The Industry View – Amazon vs Hachette 
  2. Amazon-Hachette Debate Yields Diverse Opinions Among Authors   
  3. Change.org: Petitioning Hachette: Stop fighting low prices and fair wages
  4. Authors United? I Wish it Were So.
  5. The Seattle Times: The publishers, not Amazon, keep authors down
  6. The Heart of the Matter
  7. Let’s Get Visible: Amazon v Hachette: Don’t Believe The Spin
  8. Winning at Monopoly
  9. The Huffington Post: Sympathy for the Devil: In Defense of Amazon
  10. GigaOm: If you love books then you should be rooting for Amazon, not Hachette or the Big Five
  11. The Cockeyed Pessimist: Who’s afraid of Amazon.com

2 Responses to Stephen Black commenting on Amazon commenting on Hachette

  1. I enjoyed reading your rebuttal. I can’t agree more that what we really need is focus on getting spotlights on indie authors and looking at those at the bottom of the price curve. I’ve seen what happens to indie authors who price their ebooks at $9.99.

    Honestly, I agree that that’s an unnecessary price, but maybe that’s because I compare their prices to paperbacks. I’m never going to pay hardcover price for an ebook, nor will I ever ask someone to pay it for mine. I don’t feel movies in a theater are worth $10, and I don’t feel the an ebook is worth $15. Although that’s a good way to get your book out there — via piracy.

    The readers are out there. They are starving for books. They aren’t looking to spend $10-$15 on them in digital form, though. Not all readers are upper middle class, and most of the middle class and lower readers I know don’t have that kind of budget. They’ll read 10+ books a month if given the access. That access typically comes through the $0.99-$2.99 section and the library.

    So then, how does the newly published author from that range get their book out there? I have a steady readership via word of mouth, but that’s unlikely to make me a bestseller. I’ll still keep writing (I’m really doing it to entertain the readers, not the money, obviously), but it does hurt every time I have to stop writing to market my stuff.

    They really are pretty words, Amazon Book Team. How about showing some real support to your authors, though?

    • H.S., thank you very much for your kind words and the thoughtful reply. I keep thinking that whoever gets the “spotlight on indie authors” thing happening will make a lot of money and genuinely improve the “reading culture”. The spotlight would have to be directed by a human, not just algorithms.(Amazon actually does have mechanisms in place to catapult anyone who is showing sales action, but algorithms are cold and mechanical.) Maybe there are already some critics or book reviewers out there who have enough clout to launch careers…? And, as always, how to get something in front of them…?

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