The screw you ebook deal

images.jpgEvery week it seems something new is happening in eBookland to set the ebook cause back a decade or two. Always at the forefront of the reversal of fortune is greed. This week’s menace to eBookland is literary agent Andrew Wylie and his new publishing venture Odyssey. Wylie could have summed up his actions in simple terms: to disserve both his clients and the ebook-buying public. What, you ask, did he do? He agreed to give Amazon exclusive rights for 2 years to his authors’ backlist titles; Wylie will publish the books and exclusively sell them through Amazon. The backlist includes authors like Philip Roth, Ralph Ellison, and John Updike. This is tragic on many levels. First, unless he has been given exclusive information by Amazon, he really doesn’t know how much of the ebook market Amazon “dominates.” All Amazon says is “we’re #1″ but has yet to actually prove it. Everyone assumes it is true, but without hard data, it is just an assumption (and you know what assuming does — it makes an ass of u and me!).


Second, even if Amazon has the largest single-vendor market share, it isn’t certain that how dominant a market share it has when all players are considered. Everyone assumes it does, but no one really knows — Amazon hasn’t put any real numbers on the table, just the hype, which makes me suspect that that’s all it is –hype.

Third, contrary to what Wylie thinks about his backlist authors, there is nothing out in the open that demonstrates that they are worth the $9.99 that is planned to be charged. What data does Wylie have to demonstrate that $9.99 is the ideal market price point for decades old books? I might reread Ellison at $1.99, but not at $9.99 — he (and Roth and Updike) just aren’t that good. Wylie complains about the Agency 5 pricing and then proceeds to draw a number out of the air himself.

Fourth, 2 years is a long time to exclude all other ebooksellers from having the ability to sell these books. It ignores the thousands, if not millions, of readers who do not buy from Amazon and who do not own a Kindle (and who do not want to read on their PCs or cell phones). If Wylie were my agent, I’d be looking for another one. As a writer I wouldn’t want thousands (millions) of potential readers excluded. As icing on the cake, no one knows whether at the end of the 2 years Amazon has an option to extend that exclusivity. It would fit Amazon’s usual tactics.

Fifth, if Wylie’s goal is to sell as many of his client’s books as is possible, why would he give exclusivity to a company who uses a format that is incompatible with every other ebook-reading device? I hear the pundits now: Because Amazon has an application that lets you read on nearly every device imaginable, just not other dedicated ebook reading devices.

This argument intrigues me. I understand James Patterson or Stephen King taking this position because they are currently writing bestsellers. The likelihood that someone will agree to read the latest James Patterson novel on their mobile phone or their PC is decent — not great but decent. But will these same people want to read a long ago Roth or Ellison or Updike novel that way? I have my doubts. I don’t personally know anyone who reads a book sitting at their desk on their PC or on their cell phones for pleasure (although I am assured that there are people who do), because that is what we are talking about — pleasure/leisure reading.

The argument also discounts all the people who buy ebooks at, for example, Barnes & Noble, which also has applications for various devices and keeps adding them. Are we to be an ebook world of Amazon only, perhaps a little B&N, but no one else?

Sixth, is the arrogance factor. Wylie doesn’t like the Agency 5′s pricing. Fine. Most ebookers don’t either. But you tell me how giving Amazon 2-year exclusivity at $9.99 sends any message of dislike about Agency 5 pricing to the Agency 5 — or even to the consumer. The only message I get is the one to the consumer, which is “screw you! If Amazon is willing to pay enough for exclusivity, I could care less whether you can read my author’s books.” Reminds me of an old radio ad: “Money talks and nobody walks!”

I admit that John Sargent’s (Macmillan) response was laughable in light of his own actions as a founder of the Agency 5. But even so, his response was on target. This exclusivity deal is not good for anyone. Is the goal to discourage reading and drive sales down? If so, these long-term exclusivity deals are a good step in that direction. People are interested in buying books only if they are available when they want them, in the form they want them, and at a price they are willing to pay. Wylie’s exclusivity deal is a 3-strike out: the books aren’t available to many readers in a form they want at a price they want to pay for ghosts from the past — $9.99 is the price point for new bestsellers, not old books from has-been authors.

And did Wylie give any thought to what state of affairs he is helping to create in the long-term? If giving a 2-year exclusive deal to Amazon is his idea of long-term strategic thinking on behalf of clients, he needs to get off his meds. Giving Amazon these kinds of deals plays into Amazon’s long-term goals of dominating ebook publishing and being able to dictate all terms. Every exclusive deal adds a nail to the coffin of marketplace competition because once Amazon sews up a significant portion of the market in these kinds of deals, Amazon will be able to dictate terms — all other competition will have been buried because they can’t get product to sell and they won’t be able to sell for less than Amazon. (That is also one of the problems with the Agency 5 thinking but at least they make their books available to everyone.)

Now that I have castigated Wylie, a punch needs to be thrown at the Agency 5 who brought this about. What did the Agency 5 think Amazon would do in reaction to their concerted efforts to control pricing? Amazon has done the smart thing for Amazon (although not, ultimately, for the consumer) in pursuing these exclusivity agreements. If anything will undermine the Agency 5, it is these deals. Unfortunately, consumers will be collateral damage. The Agency 5 thought Apple would be their savior; they were willing to overlook the fact that Steve Jobs and Jeff Bezos are identical twins. And so they pushed Amazon and now Amazon has pushed back.

Wylie has made what I consider to be a fool’s deal, but the deal is of the Agency 5′s making. “You shall reap what you sow” should become the motto of the Agency 5; Andrew Wylie should resurrect as his motto “Money talks, nobody walks.”

Via An American Editor

23 Comments on The screw you ebook deal

  1. This moves ebooks forward more than it does backward–Wylie is just one more hog at the trough, and bringing up the conversation makes people go, “Hmm, exactly WHAT does Wylie do besides shake hands and sign contracts, and why am I paying extra for it?”

    As an indie author, i can tell you Amazon provides more than 90 percent of my ebook sales, and if I had to go with one, that’s who I’d choose, though of course I’d hate to lose that other 10 percent (unless Amazon offered something phat to offset it).

    Scott Nicholson
    http://www.hauntedcomputer.com

  2. “I don’t personally know anyone who reads a book sitting at their desk on their PC or on their cell phones for pleasure (although I am assured that there are people who do), because that is what we are talking about — pleasure/leisure reading.”

    Do you really write for Teleread?

  3. Another Amazon hater. I’m really getting tired of the same old rants.

  4. Alexander Inglis // July 26, 2010 at 11:46 am //

    The blogger refers to Wylie’s authors and titles in the series — Martin Amis, Saul Bellow, Jorge Luis Borges, William S Burroughs, John Cheever, Ralph Ellison, Louise Erdrich, Norman Mailer, Vladimir Nabokov, VS Naipaul, Orhan Pamuk, Philip Roth, Salman Rushdie, Oliver Sacks, Hunter S Thompson, John Updike and Evelyn Waugh — as “old books from has-been authors” probably not worth more than $1.99. Sliced any way you like, that’s a stunning remark.

    Andrew Wylie is doing what an agent should: find creative new ways to sell (and resell) his author’s works to the public. He’s done that and shone a bright light around the offering. (That’s called smart marketing, another part of an agent’s job.) If someone insists on reading these ebooks on a Sony reader, well, they’ll have to wait. But the works themselves are widely available in other formats for the impatient or those who, for their own reasons, choose not to do ebook business with Amazon.

    As Ben asks … Do you really write for Teleread?

  5. wow, this piece is full of glass-half-empty assumptions. a win for amazon is not necessarily a loss for consumers, sheesh.

    lots of my students (early 20 somethings) read on their smart phones. they don’t want to lug around an extra book or device. if they didn’t have pda’s, they probably wouldn’t be reading anything long-form. if anything, amazon has expanded the number of readers out there. as i see it, at this juncture, amazon’s success benefits everyone in the industry.

  6. These titles weren’t available anywhere as ebooks until now. Not for any platform, not in any format.

    Do you know WHY they weren’t available as ebooks anywhere before now?

    Because the existing publishers wanted to try to screw the authors and their estates on the royalties for them.

    That’s why Wylie is talking about when he talks about the Big 6’s “pricing”. Not the retail price, but the royalty structure. There is no value-add being provided by the publishers to the authors of these titles that justifies maintaining the existing royalty structure for ebook releases. The publishers got their bite at the apple when the DTB’s were released.

    Wylie got sick of the publishers’ bad faith negotiating tactics and took the 70% Amazon is offering instead of the 8% to 20% the Big 6 was offering.

    The exclusivity doesn’t make a lot of sense to me personally, since I don’t see the value Wylie is getting for it in return. The first 20 titles are smoking up the Amazon Best Seller charts, but they might have done that anyway. But he’s the agent, not me.

  7. I think Ellison is a great writer. Updike, too. Besides, the price is about competing with paperback prices and the e-books will do that at $9.99. The books are still under copyright, after all. Better to pay $9.99 for Ellison than some crap-tastic pop writer like Dan Brown.

    (Although I don’t really think I should be paying a third party to read the works of a dead guy.)

  8. because that is what we are talking about — pleasure/leisure reading.

    Don’t forget the academy. I read Updike, Mailer, Roth, Nabokov, etc. in college (I was an English major and my lit. concentration was 20th century American writers). I would imagine there is a market among students with iPhones and iPads who can download the Kindle app.

    I agree that the exclusivity is a very bad idea for everyone except Amazon. I’m fine with the idea of Wylie showing his back to the publishers who were (apparently) dragging their feet about making an acceptable deal, but the exclusivity–whether with Amazon, B&N, or whatever–is a very, very bad idea.

  9. Felix Torres // July 26, 2010 at 1:41 pm //

    Sometimes it is best to keep quiet and wait for the dust to settle.
    This being teleread, I’ll merely point out two other posts (one just before, one just after) that pretty much counter the whole diatribe.
    First, it seems that the Wylie Agency (properly) scared the pants off the other BPHs who are now offering 50% ebook royalties on backlist titles instead of the paltry numbers that drove Wylie’s clients to the Odyssey solution. Sounds like a win for authors and a win for readers as more content is coming in e-form.
    Second, the Wylie deal happened because Amazon matched the Price-Fix Five’s terms which, once the Price-Fixers disintermediated, resulted in royalties in the 60%-plus range for the authors. About *triple* what caving in the the BPH “open” rates. Ideological purity is nice; triple royalties on 80% of the market is better even if it means forgoing access to (at most) 20% of the market (which implies non-Amazon buyers don’t use Kindle apps or deDRM). Add in the kick in the pants to the BPHs and the deal is looking like a win for everybody exceptt the anything-but-Amazon crowd.
    Long term, the sky is not going to fall.

    We’ll see more exclusives but the practice is not going to be widespread as long as the BPHs actually pay reasonable royalties on multi-vendor contracts.

    And, let’s not forget; exclusivity contracts are a *direct* reaction to the elimination of the Price-Fix scheme. If the BPHs allowed discounting of ebooks, Amazon’s competitors might have some way to compete other than proclaiming “we support epub!”.

    This is just another example of the law of unintended consequences; by openly claiming for themselves 70% of the book price, the BPHs established a hard benchmark against which *their* services can be measured. And on backlist titles it is easy to see they do nothing to merit 50% or more of the retail price. Now they have to face a reality where, to keep authors from taking their ebooks to Amazon or B&N or alternate publishers, they have to flip the rate tables and offer up 50%-plus to the author and the agent and make do with the 20%-or-less rate they were offering authors just last week.

    I’m thinking this is P-R-O-G-R-E-S-S.
    Just desserts for the BPHs.
    Bet they’re loving the new “AGENCY MODEL”, huh? :)

  10. Felix Torres // July 26, 2010 at 1:45 pm //

    Whoops; that should read: “Exclusive contracts are a direct result of the elimination of *retail discounting* by the Price-Fixing Scheme.”

  11. I don’t own a Kindle, nor do I want to, so I’m not too happy about the Amazon exclusivity. I’m surprised at the contract, since I thought the Amazon deal is 70% of retail price, the price had to be $2.99 – $9.99 and less than the paperback edition, if there was one, and that one couldn’t sell the ebook at other retailers for less.

    Here’s another issue with the Amazon exclusivity: no library ebook editions. The Kindle doesn’t support it (even though the mobipocket format does, go figure).

    I’m also getting annoyed with the $9.99 figure. I’ve got a Nook, and I’m running into more ebooks where priced at $9.99, or even $7.99, yet there’s a paperback available on the B&N site discounted to $7.19, so I’m paying more for the ebook, which I can’t loan out or sell, than I would for the book. I just grumble and refuse to buy it.

    Another thing with the $9.99 backlist. It’s all about money-grubbing heirs who have done nothing creative to deserve it. If I’m going to pay higher than average ebook prices, I’d rather it go to live authors who are still producing, to encourage them to keep writing, than to heirs of best-selling authors who are trying to squeeze every last penny out of the readers, many who probably already own copies of these works in print.

  12. Can’t you get used physical copies of most of those Wylie books for less than $9.99?

    I don’t like Amazon, because they started the whole exclusive format thing. But the more I think about it, as a consumer I don’t really mind exclusive deals. I just hope enough agents and authors are smart enough to sign them with other (hopefully epub) retailers, so that we don’t end up with a monopoly on our hands. If you’re counting on people reading on free apps anyway, why not?

  13. @Alexander: Yeah, that was my first thought, too–“John Updike is an outdated has-been whose work is bargain-bin crap?”

    Indeed, what Wylie is saying here is that there is no “backlist” anymore; publishers just have a catalog.

  14. It seems to me there is a lot of unjustified hype about this move by Wylie. Yes it seems risky. Yes it seems short sighted. But the claim that it damages anyone else but himself and/or his clients is completely OTT.
    We are in the infancy stage of this new eMarket. It is good that people are experimenting with new models, even if this one seems a little crazy. Neither agents nor publishers should be monolithic groups acting in lock step. This is a market economy and let’s see over the next couple of years who comes up with the best and most successful strategies for the consumer and the different parties.

  15. Common Sense // July 26, 2010 at 3:48 pm //

    I agree with tbrookside, the goal was to point out that authors don’t need the big 6 publishers to have successful ebooks and that they have other avenues for getting their books out there.

    As far as I’m concerned, Amazon has always been on the side of the consumer. Their prices on almost everything are very good, I was buying books from them long before ebooks. Why should Amazon have to sell an ebook for $7.99 when the paperback is $5.46 at Walmart, Target, or the grocery store? The agency model screwed consumers and they know it.

    As for the backlist, why would I ever pay full price for a book many years old? I can either reread my physical copy, or get it used or at a library. Backlist titles should be made available for a low cost.

  16. More profanity-laden underinformed Amazon bashing? Really, teleread, you’re becoming a bit predictable recently. At least *try* to hide your bias.

  17. Not really seeing the profanity in there. Maybe you could point it out? I mean, it should be easy, since it’s so laden and everything.

  18. DensityDuck, “screw you” and “ass”… and last time it was “sure as hell had better stop”… laden may have been hyperbole, but anything masquerading as even semi-serious journalism ought to be able to make a strong point without profanity. It reeks of barely restrained hostility.

  19. What I find really funny about all this is that if we post articles that dare to suggest we like the way Amazon is doing something, we get accused in comments of being Amazon fanboys…but if we post something critical of Amazon, we suddenly have a “predictable […] bias”.

    You can’t please everybody no matter what you do, I guess.

  20. Felix Torres // July 27, 2010 at 8:55 am //

    Tone matters.
    Articles critical of Amazon (and many postings “refuting” articles that aren’t critical of Amazon) tend to be loaded with emotionally-charged, negative terms that really have no place in a rational discussion of what are at heart cold, practical business decisions.
    Too many of the “amazon haters” are simply dismayed that the company doesn’t just roll over and play dead for their opposition and that their business plan, despite their personal disapproval, seems to be rolling merriy along, capturing buyers and generating income left and right.
    Rational discourse requires divorcing rhetoric from logic and these kinds of poison-pen articles, do neither side of the debate any good.
    Some might think emotional debate draws in traffic but there is traffic and there is traffic and I don’t think many Teleread readers want this particuar site to devolve into a flame-filled battleground like the gaming websites with their warring hordes of fanboys and nay-sayers.
    Some articles are best not linked to.
    An effort to maintain a civil tone towards all players in the field would be greatly appreciated.

  21. Chris, you’re right, of course. And of course there are different contributors with different perspectives and biases.

    This is just the second article in a week with anti-Amazon content that is long on opinion and vitriol, and short on accurate facts. David Rothman’s article of July 20th and this article both sound like they were written in fits of rage.

    There’s absolutely nothing wrong with criticizing Amazon when criticism is due. And while I felt David’s article was sheer petulance, at least this article had some point it was trying to make. But the author’s use of misinformation, half-truths, and overly emotional language simply dilutes his point and makes his motivations suspect.

  22. I’m all for Wylie circumventing the publishers and marketing his clients’ work straight to ebooks. What, exactly, do publishers have to offer this group of established authors?

    I don’t like the exclusivity. What choice does B&N have now but to issue its own exclusive titles? We’ve seen this stage of format wars before, in Beta vs. VHS and HD-DVD vs. Blu-Ray, and it simply adds confusion to the marketplace and causes frustration to consumers. “Do I buy a Kindle for books A, B, and C, or a nook for books X, Y, and Z? Or do I just sit out the ebook thing until they get their s**t together?”

    As long as Amazon plays this “exclusivity” game, there will market confusion until someone wins…and it may not be Amazon, it might be everyone else and the ePub format.

    And $9.99 is too much for most ebooks, especially those laden with DRM.

  23. Jan Strnad makes a great point about exclusivity deals and format choices.

    Wylie has every right to do what he has done but I also hate the exclusivity part. These are authors I read and would purchase if they were available in almost any other format as my ereader can read almost every other format.

    Instead, Wylie has lost multiple sales from me. The question for Wylie is how many more sales out there has he lost by restricting the format. Maybe the deal is worth it to him and his authors (or authors’ estates) but I’m not going to cry when they scream about unauthorized copies floating around the Net.

    Give me a legal copy to purchase that I can use on the ereader of my choice and I will, otherwise they can STFU as far as I am concerned.

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