There are no good guys in the Amazon/Big Publisher battle

amazon is not a white knightIt’s human nature to want to find good guys in just about any conflict, and most of the coverage about Amazon and Hachette just reinforces that.

Hachette authors have been yelling that Amazon is the bad guy, and their assumption is that Hachette has been looking out for their best interests. As a recent comment from David Gaughran on a post on The Digital Reader demonstrates, that’s not necessarily the case. He posits several scenarios stemming from recent Hachette leaks and shows how they might be interpreted, and not in Hachette’s favor.

The flip side, of course, is people calling Amazon the good guys. However, Amazon isn’t the white knight in this issue, and not just because Germany publishers have now filed an antitrust complaint against Amazon. Businesses frequently push both legal and ethical lines in pursuit of their goals. I’m not condoning the practice. I certainly don’t like it, but it’s what happens, which is why it’s short sighted to try to find heroes in business negotiations. Looking for the “win” can bring out the worst in anyone.

It’s important to keep this in mind as you read stories and make decisions about which companies to do business with. Just because publishers and Apple were shown to have illegally fixed prices doesn’t automatically make Amazon good. If Amazon is shown to have engaged in antitrust behavior, that doesn’t make the publishers good either. It’s possible for both sides in a conflict to behave badly.

So what’s a reader or author to do? Readers need to consider the whole picture: ethical (or not) practices, price, convenience or what ever other criteria you use to decide who to buy from. If you use those criteria and decide not to buy from Amazon, that’s a rational decision and shouldn’t be criticized by others. If you decide to buy from Amazon, based on your criteria, that’s also rational.

Authors? Treat your writing as a business. Keep your options as open as you can and remember you’re in this for the long term. It’s likely Amazon will change their payment structure to authors. It’s likely traditional publishers will change their royalty structure. Either change could go up or down. We don’t know yet. When possible, use as many channels as you can. Then you’ll be best positioned no matter what happens.

Authors (and readers), above all remember that Amazon isn’t your friend. Nor are traditional publishers your friends (though individuals in the respective companies may be). Ultimately the only one who has your best interests at heart is you, and don’t believe anyone who says otherwise. In business, the only thing you can count on is change.

Image credit: Petr Novák, Wikipedia under a Creative Commons license

7 Comments on There are no good guys in the Amazon/Big Publisher battle

  1. Good advice. I would suggest, however, that this isn’t an issue about who is the good guy and who is the bad one matters much. I’m sure both Amazon and Hachette behave in less than impressive ways.

    No, the real issue is which side should be supported for the good of publishing in general, including authors, readers, and publishers both large and small. That clearly tilts to favoring Hachette in this dispute.

    Hachette is merely a giant publisher. It can accept or reject an author’s books, but it can’t keep him from being published or engage in any schemes to hurt his sales. It can raise prices, which undoubtedly upsets DOJ lawyers who earn hundreds of dollars an hour. But those higher prices only mean that readers will turn to books by other authors and publishers, helping them and ultimately hurting Hachette. Personally, as an author I’d be delighted even Hachette sold every one of its ebooks from $39.99 and up.

    Amazon, on the other hand, owns some 70% of the ebook market and a larger slice of the print book market than anyone else. It can and has yanked the Buy Now books of some authors and publishers. It can and has added large shipping delays to those books. Amazon can do a lot of harm to an author or publisher’s sales. And, as Juli notes, it has enough market power to dictate author royalties.

    Say that you’ve got a trilogy of popular genre novels that you’d like to sell together for $9.99 and suppose monthly sales will be 1,000 copies. Currently Apple will pay you $700 a month. Amazon will pay you a bit under that thanks to its download fee. Let’s be generous and say that’s $650. Admittedly there’s not lot of difference between the two, although I’d certainly like that extra $50.

    Recent remarks Amazon has made to German officials, however, suggest the company thinks that author royalties should be in the 50-60% range. All of a sudden that monthly deposit from Amazon has become $500 and the missing $200 could make a big difference in your life. And that’s not getting into the fact that Amazon, in its heart of hearts, probably wants ebook authors to get only 35% royalties, pocketing 65% itself. I’m not making that up either. If you look at your Amazon contract, you’ll find that’s already what Amazon is paying authors outside the narrow $2.99-9.99 range. That 35% pittance, scarcely more than some publishers are paying authors and they’ll be busy promoting your book.

    Keep in mind that Juli’s advice to keep you options only works if there’s a competitive ebook retail market out there. Amazon’s current 70% market dominance already has threatens our ability to use options.

    I can give an example of how things could go. Back in the mid-1990s, I had a friend who worked in purchasing for Boeing. She hated what her job had become. Boeing expected her to call up the small to medium aerospace firms that supply Boeing with parts and say, in essence, “This is to let you know that we have been paying you $100 for this part. From now on we will pay you only $80.”

    Boeing could get away with that because Boeing is one of the few purchasers of commercial aircraft parts. Amazon is in a very similar position for books and ebooks. It can dictate terms under which authors and publishers have to work. Hachette can’t do that and never will. Amazon can hurt us and hurt us badly while Hachette can’t. It’s almost that simple.

  2. The problem with your scenario, Michael is that on Amazon you’ll sell a thousand books. But on Apple, you may sell 100. Amazon openly (and behind the scenes) helps indie authors by promoting their work in emails, coming up with marketing programs for authors and featuring their books in prominent places on their website.

    Apple, on the other hand seems to side with big publishers (to the point of colluding with them).

    So, in the end, even with a lower percentage from Amazon, chances are you’d still be making far more money than you would with Apple or B&N. I personally like the thousands they pay me every month versus the hundreds I get from Apple. Or what little I got from my former Big 5 publisher at twelve cents on the dollar.

  3. Jake, I assume that Michael is well aware of this (and he hasn’t denied it yet). That’s why he keeps on selling his books on (and complaining about) the store that he feels is doing him dirty, rather than pulling them in moral indignation.

  4. Cool piece Ms. Monroe – and very level, rational discussion of these issues. I just commented elsewhere about your article, but as this is one of the few articles that says be wary of both, it heralds at least another comment :).

    I agree about both Amazon and the Big 5 – they’re both businesses that engage in some harrowing stuff from time to time. The whole debate with Hachette and Amazon is between large, multinational businesses over pricing. A lot of details haven’t even been revealed, so it’s hard to run on much besides assumption (we do have some info, but not a lot of specifics as far as I remember).

    Amazon is a single market and they do dominate – rather than monopolize – which is a position that may or may not be bad in the long run. The Big 5 have already shown they are hesitant with midlisters and new authors while also trying to manipulate for higher prices. However, Amazon is still just a single avenue. In the future, they may get rid of non-exclusionary rights for authors, but I think that they will be shooting themselves in the knees publishing-wise if they do that – which is implicit here.

    But yeah, Amazon is a business, as are the Big 5. There may be friendly aspects to both, and both certainly fulfill certain roles very well (I don’t denigrate either one until illegalities and exploitation are evident). They’re simply business partners, as you said. Loyalty can only go so far as there is reciprocation. If Amazon decides to screw its authors by doing this, then they suck. If the Big 5 crosses further into monopsony territory and cronyism, then they suck.

    Anyway, thanks for the thoughtful piece and great advice.

  5. Juli Monroe // June 28, 2014 at 11:12 am //

    @Chris, thank you for your comments both here and on Passive Voice. I get so tired of the one-sided coverage (on both sides), that I felt it was time to say something. I noticed David Gaughran, who is also good about being impartial had an excellent post on his site today which criticized the lazy journalism around these issues.

  6. “Amazon openly (and behind the scenes) helps indie authors by promoting their work in emails, coming up with marketing programs for authors and featuring their books in prominent places on their website.”

    Nope, it is actually pushing for cheap ebooks — I do mean books that are not expensive.

    And if we self-published authors are not aware of this, then we deserve to be screwed if screwjob happens.

    Unfortunately you won’t read any thoughts regarding the “KDP ultra-dependency” in the indie sphere. As a matter of fact, it is currently all about gurus and “propagangsters”!

    Some self-published authors like J.A. Konrath are selling the major part of their ebooks to other self-published authors for example, just because they are as vocal as gurus telling you you can become rich within six weeks…

    I think it is about time we start to think about this ultra-dependency because it is objectively toxic.

  7. One’s perspective also makes a difference. Readers will view the situation differently than Hachette authors or Amazon authors, differently than independent publishers, and differently than Big 5 publishers. I, as a reader, applaud Amazon for its catalog and making everything available at a competitive price. If I were a Hachette stockholder, speaking French, no doubt, I suspect my attitude would be different.

    I’ve read Mr. Perry’s comments in numerous places and I remain flummoxed. One would think he was being forced to sell through Amazon. If he can get a better deal elsewhere, why would he stick with them?

    Amazon’s biggest challenge will be to remain flexible and nimble as it continues to expand. As new models come down the pike readers may look elsewhere. Scribd and Oyster look quite appealing and I’m trying out Scribd.

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