Hugh Howey's Blog, page 5
June 2, 2014
Has anyone paused to consider how difficult and expensive it would be for Amazon to delay the shipment of certain books by certain publishers? It would be a massive pain in the ass!
What is almost certainly happening with the delivery time of Hachette’s books is that Amazon isn’t keeping its predicted sales quantity in stock. One of the major advancements in retail over the past several decades has been the move to on-time delivery. It means an order for new product is made before it’s needed, so the product spends as little time warehoused as possible. This ability is worth billions; it is expensive to develop and hone; and it’s a service that Amazon provides to all of its retail partners. Hachette and the rest of the Big 5 can’t possibly appreciate what this skill entails nor how much they benefit from Amazon’s expertise in this area.
When Amazon stopped stocking predicted sales quantities, that put the shipping burden on Hachette, a company that’s dreadful at delivering at high speeds. They haven’t had to master this skill. Amazon has done it for them. Hachette author Michael Sullivan suspected the shipment delays were from Hachette’s end and not Amazon’s. He asked his publisher for shipping invoices. Hachette refused to provide this information to its author. The delays are far more likely to be Hachette’s fault, not Amazon’s.
A bit of an aside here to tell you what ordering books was like at the last bookstore I worked for. We had several sources for books. We could order from one of the major distributors like Ingram or Baker & Taylor and get the books within three days. The discount was generally around 40%. We could also use NACS (the National Association of College Stores). This was like shopping on Amazon, with a great website (but horrible search ability). These books might come in two days. The discount was also around 40%. Most of our orders went directly to publishers.* This got us the best discount by far — from 45% to 50%, depending on the publisher, title, and quantity. These books took at least a week to arrive, usually longer. Often, it was two weeks. By the time these books arrived, I barely remembered having ordered them.
The ordering process was also bizarre. To order books, you called an actual person and read off the ISBN and quantity for each book you wanted. Seriously. It was my least favorite task at the bookstore. It could take half an hour to place a large order. Half an hour of saying numbers to a stranger. And every tenth book, they’d say that the book was no longer available. You didn’t know until you ordered. Two or three years ago, publishers started moving toward an online ordering system, which I worked to get us on, but this wasn’t much easier. It meant typing out all the numbers and delimiting them with commas. You’d have to see this process to believe it. I certainly didn’t. I assumed we were the only bookstore in the world that still did this. I couldn’t believe there were full-time jobs for people to sit there and take phone orders for books.
Back to Hachette and Amazon: Imagine what it would mean for Amazon to purposefully delay orders. You have an entire network of distribution centers, warehouse pickers, packing/shipping/trucking processes, and in order to spite a company you’re in negotiations with, you begin artificially delaying shipment of only certain copies. So into this complex machinery of sending out products all over the world, you toss this wrench: “Yo, keep moving products as quickly as humanly possible. Unless it’s a book by Hachette, in which case slow the process down.”
Someone pointed out that this could be done digitally, but why go through the trouble? Why not show the publisher what the customer experience would be if Amazon wasn’t there to predict the orders and handle the shipping? That’s what my boss and I did at our bookstore. We watched inventory levels and made our publisher orders a week in advance to minimize our out-of-stock time. Rather than an artificial delay, it’s far more likely that Amazon adjusted the predicted demand for Hachette titles, maybe even to zero. So here’s a hypothesis that explains both the delayed shipping and the removal of pre-order buttons: Amazon isn’t certain it will be selling Hachette books in the near future.
Think about it. A pre-order is a guarantee of a future transaction. It would be remiss for Amazon to offer pre-orders for items it won’t legally be able to sell when they eventually become available. It would also be remiss for Amazon to stock millions of dollars worth of inventory it won’t legally be able to sell in the near future and would have to return at great expense. The moment Amazon realized negotiations were breaking down (as their press release recently intimated), they had to reduce their exposure to Hachette inventory. That means reducing future sales, which is what pre-orders and predicted warehouse quantities represent.
These moves by Amazon might be less about spite and more about pragmatism. Even legality. That book you pre-ordered from us two months ago? We no longer have a sales relationship with that manufacturer. Here’s your refund.
Both major moves explained by a probable and unbelievable reality: Soon, there may not be any Hachette books on Amazon at all.
*Two reasons for placing most of our orders directly with publishers: The first is that bookstores make most of their margin in that 3-5% they save. The second is that returns to publishers for unsold frontlist titles can be as high as 50%, but you can only return a percentage of what you order. Placing all backlist and re-stock orders through the publisher padded this number to make sure we never fell outside of our returns margin.
Brilliant film. I hope everyone who read the book catches this. And those who haven’t go to the film and pick up a copy of the book. This story deserves to be enjoyed in all mediums and more than once.
Of course I love how John credits his fans for all his success. See what you all are capable of?
June 1, 2014
A comment on my previous post bears a detailed response. Paris points out that we should be wary of what Amazon does to us in the future. I see this sentiment everywhere, even among Amazon supporters, but especially from their detractors and their competition. The warnings swirled all around BEA.
Paris: I don’t care about the Big 5, whatever position they’re in they’ve brought it on themselves, but we shouldn’t be ignorant about what could be coming or we’ll find ourselves just as blindsided.
I don’t think I’m ignorant about what could be coming. I have just decided to worry about today instead of operate in fear for some tomorrow. I own my rights. I’ll pull my books down when it makes sense to do so. Until then, why let some hypothetical guide my decisions?
Furthermore, why would I punish Amazon’s generosity and service with doubt, distrust, and paranoia? That’s not how I live my life. You are good to me, I love you back. I love you fully. You destroy that trust in a way I cannot forgive, and I don’t even hate you. I am just disappointed, and I go somewhere else.
I’m not saying others should live their lives like this, but it’s how I operate. Is Amazon more likely to screw us in the future if we run around, flapping our arms, saying they are a lurking and greedy evil, and hating them for what they have not yet done? Or are they more likely to screw us in the future if we partner with them, appreciate them, and sing our thanks?
I’d rather live in a world where I do the latter and am eventually disappointed than the former world where I meet generosity with wariness and have my fears confirmed. Call me naive. I call myself happy.
May 31, 2014
One of the yacht owners I worked for years ago was a master of the board game Monopoly. He did not like to lose, and so my boss left little to chance. In Monopoly, the element of chance comes from the roll of the die and the various intentions, choices, and strategies of individual actors. But my boss did all he could to bypass this democracy of the die by appealing to the emotions of the players and lobbying for sympathy and support.
On rainy days, we would unfold the board game and sort the money and cards in the salon of his boat. Me, playing the shoe, would dutifully serve as the reluctant fourth. I’d then watch my boss guilt his daughter into not erecting a hotel there, or cajole his wife into some disadvantageous trade. Pitting us against one another meant that even when he was behind, he was ahead. And once he did get ahead, he never let us think it. He was always the underdog, even with power. And we were each other’s threats, even when we were weak.
A similar game is being played in the book industry today, as it has been played in many other industries. Here at BEA, I’m hearing a lot about monopolies. (And monopsonies, for those who prefer to quibble semantically rather than understand what is meant and forge ahead in productive conversation.) Practically everyone here at the book expo believes that Amazon has gotten too big, that they wield a disproportionate amount of power, and that they must be reigned in or defeated.
I am told, without exaggeration and in all seriousness, that Amazon wants to “crush their competition.” I hear that they want to “put everyone else out of business.” Two things are true, both of which make these statements ridiculous: The first is that Amazon most certainly doesn’t want all of their competitors to go out of business, because then they’d be the only game in town and the government would have no choice but to break them up. The second is that of course they are acting as if they want to put their competitors out of business. That’s how you improve your business practices. You try to out-do your competition.
Unless . . . you don’t understand at all what it means to compete. Which I think explains the righteous indignation. But I’ll get to that in a minute.
The 800 Pound Bear Cub
Amazon is a young company, and already they have disrupted the entire publishing establishment. First with the stocking and discounting of practically every book in print, then with an online sales platform that employs customer reviews, shopping habits, and big data to provide algorithmic recommendations. More recently it has been with the release of the Kindle and the KDP self-publishing platform, before finally moving into actual publishing with their own imprints.
In many ways, Amazon has decided to compete with itself. The move toward e-books seems strange for a business founded on shipping the physical product, but it’s the companies who control their obsolescence who thrive. Apple is such a company. Eastman Kodak is of the other sort. Publishers could have realized years ago that they are in the story development and delivery service, but they thought it was all about books. Which pretty much underscores all that has happened since.
While Amazon’s developments and innovations have been lauded by customers, the same maneuverings have been just as vociferously impugned by legacy publishing and its adherents. A single company (often a single man’s name) absorbs the full and illogical blame for what has been an inevitable move toward online shopping and on-time delivery.
Ironically, the biggest losers in this shift have been yesterday’s villains. The massive brick and mortar discounters—who once were blamed for literature’s downfall, who sold “loss leaders,” who roughed up publishers in negotiations—have become the bulwark behind which all legacy hopes now hunker. Little explored is the possibility that Amazon is helping independent bookstores by clearing out these former predators.
When it comes to discounting and selection, B&N can’t compete with Amazon. When it comes to book browsing, Amazon can’t compete with curated independent bookstores. If you line the three sales models up from small indie stores to big discounters to Amazon, you’ll see that neighbors compete with and harm one another. Concurrent with the shuttering of Borders and the shrinking of B&N, we are also seeing a rise of indie shops. Coincidence? Or are we heading toward a future where Amazon and indie bookstores coexist because they provide two very different shopping experiences and fulfill quite separate needs?
Best estimates give Amazon roughly half of the book market. With the shutter of Borders, B&N now has a more disproportionate control of brick and mortar shelfspace than Amazon does of online book sales. This is especially powerful as the rest of the smaller bookstores have less leverage for bargaining with publishers. Who is the monopoly?
Similarly, the merger between Penguin and Random House has created a mega conglomerate that accounts for half of the major publishers’ revenue. There was very little outrage at this merger, which will result in lost jobs and fewer places for authors and manuscripts to compete. Instead, we heard how greater efficiency will help these grand institutions compete with that evil company trying to lower prices and raise author pay. Again, who is the monopoly?
All of this brings us back to the shock and indignation of Amazon as a company intent on eradicating its competition. Why shouldn’t they? Is diversity in the marketplace as important as progress? Is it better to have one or two companies fighting for writers and readers? Or do we need a nice mix of abusers thrown in just for the sake of variety? All businesses should approach the marketplace in an attempt to be the absolute best at what they do. To compete.
Ah, but all of this does seem crazy when you aren’t used to it. When you are used to living in a gentlemanly culture of collusion and cartel. When competition appears dirty and unseemly. Why compete when you can agree to offer the same terms to all authors and the same high prices to all customers? If you can milk your suppliers and your customers and get away with it, why bother with the messiness of innovation and efficiency? How dare anyone tip the applecart!
The real monopoly, once you start examining business practices and attitudes, is Big Publishing itself, a group so entrenched with one another and indistinguishable from one another that they simply go by the collective moniker: The Big 5.
Their contracts are functionally identical. Their e-book royalties (and most others terms and clauses) are lockstep and are not negotiable. They have a history of working together in a noncompetitive fashion in order to raise prices for their customers (prices that they would love to set at twice what mass market paperbacks formerly cost). Conferring by phone or email in this culture is considered polite, not illegal. It wasn’t long ago that top editors at the major houses would meet on Wednesdays to discuss the bestseller list, to congratulate one another on acquisitions, and to discuss business plans and practices. All completely normal. Celebrated, even.
When members of the Big 5 do compete (truly compete, not just offer varying marketing promises and sizes of advances), the offender needs to be reigned in quickly. When Simon & Schuster innovated with print-only deals—thereby landing bestselling authors who were otherwise never going to sign with any major publisher—the resulting press on these deals (and likely pressure from other publishers) caused an immediate retreat. The poor publisher who stepped out of line dutifully pulled back into rank. Print-only deals were no longer on the table. Contracts snapped back to their immutable and noncompetitive form.
Or what about the “most favored nation clauses?” These pernicious contractual entities stipulate that any authors who get higher royalties in the future will trigger a retroactive match in royalties for select existing authors. This is like a sports contract that simply stipulates “I’ll always be the highest paid player.” It hamstrings all the publishers in a knot of anti-competitiveness. Where is the outrage or the reporting? Once again, we have a hardening of the monoculture where dissent is impossible and innovation stifled. Instead, the major publishers play Monopoly like my boss used to.
Unable to tolerate a move toward democratic literature, where any voice is free to publish, where authors are paid 70% of list price instead of a mere 17.5%, they rely instead on appeals to litigation, on a public relations campaign within the press, and on collusion.
This is not new. Standard Oil received the same trifecta even as the company’s rise meant plummeting oil prices for consumers and towering advances in supply, quality, and efficiency. Unable to compete on the marketplace, other oil producers moved the war into the newspapers and then the courts, all orchestrated behind the closed doors of collusion.
The effectiveness of this campaign is still with us today, as all the small oil companies’ abuses go uncommented on while “Standard Oil” is the bogeyman lurking in the closet of antitrust conversations. The results are so sticky that many reading along right now are shaking their heads, thinking me the fool. And so the pattern persists. We watched the same thing happen to Microsoft. Interesting now all web browsers are now free and that companies can bundle them as defaults. But the stain of the campaign against Microsoft orchestrated by doomed non-competitors lasts.
Too Big to Fault?
So the question is this: Is Amazon a disruptor because of its size? Or is its size a result of previously stifled innovation? The culture of the Big 5, which was built by gobbling up successful small presses and rolling them into imprints, left the door wide open for Amazon, a company that dared to sell direct to consumers, innovate the way we read, and pay authors a living wage. You know, the first company to actually compete.
The response to this new competitor has been to blacklist Amazon-published books from brick and mortar stores and to collusion within the publishing monoculture. Where is the outcry for Amazon-published authors who are blocked from sale by practically every brick and mortar store? It doesn’t exist. The response is simply: That’s what those authors get for signing with Amazon. Imagine an observer today saying “That’s what those authors get for signing with Hachette.” The hypocrisy astounds.
In addition to the blacklisting and collusion, you now have the public vilification of this pesky upstart from Seattle who dares to compete and make the legacy publishers look bad on both price and payment. The vested interests are even able to rally the very troops they send to slaughter, as overcharged customers and underpaid authors alike fire social media broadsides in every direction, outraged that someone is fighting for the readers and the writers of the world.
Why show support for a corporation that may lower royalties to 30% in the future when you can celebrate a corporation that pays 17.5% today? Why show support for a corporation that may raise prices in the future when you can champion a corporation that colludes to raise them today? The groupthink and absence of reason is baffling.
Amazon has grown in size for many reasons, but the success of their publishing ventures has to owe much to the long-held and unbudging monopoly of big publishers. Because the moment Amazon provided a second option, customers and writers flooded to them in relief. That’s right, a second option. Cartel is just another name for a monopoly, but with more players.
We have suffered under the thumbs of a cartel that controls print distribution and refuses to compete on terms. They buy up the small and grow and grow. The company that comes along and threatens to bust this cartel up is supposed to be the bad guy?
If history is our guide, we might expect the real bad guys to pull off this campaign to the public and the courts. My boss rarely lost a game of Monopoly by employing these same tactics. Ah, but there was one day, rolling dice while anchored out in the Caribbean, when I dared to point out to my boss’s wife and daughter that they were being played against one another. It made subsequent appeals more transparent. My poor boss didn’t stand a chance after that. The democracy of the dice—that equalizing force of fair chance and individual, free-thinking actors—was too much to bear.
So let’s not be fooled by the “5″ in the Big 5. Show me how they differ. Please. And while you think on this, I’ll remind you that they were once called the Big 6. And while you think further, I’ll remind you that HarperCollins just swallowed Harlequin. Keep thinking, and I’ll tell you about Borders closing and how B&N now holds publishers and authors hostage. Not only do these publishers collude and act as one, they are slowly becoming one as well. And people are pulling for them.
People are pulling for them as they refuse to pay authors a fair royalty on the e-books that provide a better margin than hardbacks. People are pulling for them even as they attempt to charge customers twice what a mass market paperback used to cost. Who will stand against them? The media who adores them? The writers who are contractually bound to them? They have no competition.
Sorry. They had no competition. Now anyone can play at this game. Watch and see what the small and medium presses do now that they have a level playing field, provided to them by print on demand and e-books. Watch what the self-published authors do now that they can have their voices heard. Pull for these actors, the true underdogs, the real competitors. I sure as hell am.
May 30, 2014
The Passive Guy rarely speaks, but when he does, pay attention.
One of the brightest observers of the changes in the publishing world, The Passive Guy is a lawyer who runs a blog – ThePassiveVoice.com – which aggregates industry news and opinion. He quotes the choicest bits from the source, provides a link to the original, and opens the comments for discussion. At the end of each story, TPG often writes a line or two. His gift is to synthesize the complex into the obvious. Sorta the opposite of what most lawyers are paid to do.
Responding to this article in The Atlantic, The Passive Guy couldn’t remain silent. I’ve never seen him be so active. What poured out is the fiercest, most right-on, goosebump-inducing defense of the democratization of literature that anyone has uttered in years. And it bears me giving it The Passive Guy treatment.
Because who could be better for democracy than a small number of huge international media conglomerates controlling the future of ideas?
What could be better for democracy than an inbred group of gatekeepers who decide what appears in bookstores and what does not?
What could be better for democracy than contracts that control and restrict what authors are permitted to write?
PG submits that Amazon is far more egalitarian and pro-democratic than big corporate publishing is.
Want to write about your personal philosophy? Want to push the boundaries of the literary form?
Don’t go to New York. For all their pretense (read the entire Atlantic article), they’re cogs in a corporate world that’s cramped by convention and quarterly profit requirements, pretenders striking poses for one another.
This is the group that has presided over a long decline in American reading, questing for short-term gain by pushing book prices ever higher while paying authors less and less and transforming them from independent artists into anxiety-ridden grist for a soul-destroying mill.
Literature in the United States was doing just fine before the industrial literary era dawned, killing dozens of small publishers and thousands of independent bookstores.
Make no mistake about it, today’s traditional publishing establishment is the product of decades of consolidation, concentrating more and more power over what is published into fewer and fewer hands. The latest and largest example of this trend is the merger of Random House and Penguin to create the largest publisher in the world.
As independent authors arise, empowered by Amazon’s democratic commons of ideas, PG says we’re looking at a renaissance of American literature, an upheaval that is shoving the suits out and putting authors back in charge of the art they create.
Despite the dying spasms of Big Publishing, the wall between writers and readers is coming down. Uncontrolled and unmediated ideas are being released into the wild, giving readers the opportunity to decide which will flourish.
Whether the path out of corporate serfdom comes via Amazon or someone else, authors who have discovered the freedom that comes with owning and controlling the fruits of their labors are not going back to the plantation.
As Passive Guy has read the tsunami of screeds that have erupted from various participants in the legacy publishing world, he has noted a common subtext: “Big Publishing is the devil we know. It gives me enough gruel to survive. Don’t mess with my gruel!”
PG and many independent authors agree in part. We do know that devil and believe it’s time for that devil to go. Whether a new devil arises or not, we know the old one is beyond redemption. We’ve found a better way.
I’ve got nothing to say.
May 29, 2014
May 28, 2014
Enhanced e-books have had a rough start. There is a lot of potential for mixing story and media, but very few companies have unlocked how best to pull this off. Booktrack is one of those rare companies. All it takes is reading one story with a Booktrack to see the potential. To see what I mean, take a break and go check out the first SAND book right here. It’s quick and free. The audio and sound effects you’ll hear were put together by Peter Jackson’s sound team in New Zealand. I got goosebumps as I read this story again.
Beyond the reading, the other side to Booktrack is the ease with which you can create your own soundscape for your stories. A mix of Wattpad and ACX, Booktrack is a brilliant writing platform as well as an aural creation platform. You just write or copy in your story, choose from the tens of thousands of mood tracks and effects, and layer them in. It’s so easy that schools are using Booktrack. Kids are not only getting exciting about reading by using Booktrack, they are retaining more of what they read!
Seriously, I haven’t been this jazzed about a new way to read (and write) in forever. I’ve had readers send me songs over the years inspired by my works, and now those creative folks can be turned loose on the books they love. In fact, we want to help you all see how easy and fun it is by having a contest. With over $20,000 in cash prizes!
We have taken my novel HALF WAY HOME (my wife’s favorite) and made it free to read on Booktrack. There are two competitions here. You can use Booktrack Studio to write your own HALF WAY HOME fan fiction and give it an immersive soundtrack. The winner will get $5,000 and editorial feedback from me (the latter is punishment, believe me).
There is also a soundtrack competition where you create or mix existing audio for a chapter from HALF WAY HOME. Again, the winner gets $5,000 and the chance to soundtrack my novel THE HURRICANE. The rest of the prizes and all the details can be found right here at the page set up just for this contest.
May 26, 2014
There’s not much I can say about the Hachette/Amazon negotiations that David Gaughran hasn’t covered here. David injects some much-needed rationality into what has been a bizarrely irrational debate, especially since we’re all simply guessing at what terms Hachette and Amazon are offering one another. Knowing who to blame here is impossible at worst and premature at best.
I’m more interested in what Mark Coker has to say over on the Smashwords blog. I have mad respect for Mark. He gets far more right than wrong, and he’s been an excellent spokesman and business leader for the self-publishing movement. If I could sit in a pub with ten publishing peeps and clink drinks, Mark would be near the very top of the list. But as the owner of Smashwords, Mark is Amazon’s direct competitor. His post practically concludes with a pitch for his services. That should serve as one warning. The bigger warning is that Mark doesn’t seem to understand Amazon’s current relationship with Hachette. He states:
If Hachette doesn’t have the power to maintain 70% earnings, how will million-copy-selling New York Times bestselling indie authors have any power when Amazon decides to put the squeeze on them? And how about the rest of the indie community which has even less leverage over Amazon?
The problem is, Hachette does not get 70% of the list price the way indies do. Hachette gets paid a set discount on the digital MSRP, just like bookstores pay a set discount for physical books. This is why Hachette sets the MSRP for e-books at crazy prices like $14.99. If Amazon is getting a 40% discount, their wholesale cost for that e-book is $8.99. They then sell the e-book to the customer for $9.99 and make a measly dollar, or 10%. Compare that 10% margin to the 30% they make from indies. Not to mention that Amazon sells a LOT more e-books at indies’ reasonable prices.
Now think about how this works for Hachette. They get the full wholesale price of $8.99. The author gets his or her full cut (25% of net), which is a point that many commentators don’t seem to understand. Amazon, meanwhile takes the loss! All to provide customers with a better price. Remember, they are paying Hachette and the author the full amount according to the MSRP.
So of course Hachette wants to keep this agreement intact. But there’s no way Amazon can allow it. Hachette is basically screwing its authors by pricing its e-books too high and they seem to know it. That’s why Hachette and some authors are complaining about Amazon selling its e-books for the full MSRP. Hachette wants that fat check and for Amazon to suffer its thin margins.
Mark also repeats in his post a popular and incorrect jeremiad about the dangers of monopoly and all the power Amazon wields. The purpose here is to terrify indies away from Amazon and presumably toward Smashwords. The problem is that Amazon isn’t a monopoly, and even if they were, monopolies don’t work with low barriers to entry. One college kid in his or her dorm can start the next e-book sales platform, and since indies own their work, they could flock there in an instant. That’s the new reality for tech firms. It’s why social media sites pop up every month and snag millions of users. Easy to create, easy for users to migrate.
The reason Amazon has any strength right now to negotiate with the real monopoly, which is Hachette (nobody else can provide their e-books), is because of indie authors and Amazon’s own imprints. Here’s what I think is going on in these negotiations (since we’re all making things up): Amazon is telling Hachette that they can’t afford to make 10% or less on e-book sales. Hachette is saying tough luck, sucker. Amazon is asking for them to lower digital MSRP to $9.99, and then let Amazon discount to whatever they see fit and take the hit. Amazon still pays 60% of MSRP. Maybe they’re even bumping that up to 70% (it’s what I would do).
Hachette is refusing, so Amazon is making their margins by simply stopping the current discounts and selling at the price Hachette stipulates to begin with. Amazon can afford to do this because they have plenty of reasonably priced offerings from indies and their own in-house imprints. In fact, higher prices on Hachette books are making Amazon’s high-margin indie and A-Pub e-books look more attractive to consumers.
Mark raises the monopoly canard to make indies think they’ll be next to incur Amazon’s wrath. But indies are already giving Amazon what they want: a healthy 30% wholesale discount (65% discount on many titles) plus reasonable MSRP. What’s to fight for? You see, Mark makes the classic mistake of seeing the 70% that authors keep as a royalty. It isn’t. Royalties are what authors earn from publishers. But self-published authors are publishers, and they are handing over ready-to-sell products. In exchange, they provide a 30% discount and keep the rest.
So let’s assume that Amazon does lower “royalties” in the future. To what? 30% of gross? The worst Amazon might do is still more generous than what the Big 5 currently offers. Why fear a hypothetical bogeyman when there are real ones? Here’s what would happen if Amazon demanded a 70% discount on wholesale from indies instead of the current 30% discount: Indies would concentrate all their promotion efforts on Kobo, the iBookstore, and Google Play. They would at the same time raise their e-book prices on Amazon so a sale there netted the same profit. This would keep earnings the same while driving consumers to other retailers. I would price WOOL at $13.99 instead of $5.99 and make my normal $4.20 per sale. I would have fewer sales on Amazon, but those I did get would pay the same. Most customers would go get it elsewhere. I would start linking primarily to other stores, blogging about how awesome some competitor is, and never promote or deal with Amazon again.
Despite what Mark Coker and others think, Amazon isn’t this stupid. If you ask me, Hachette is bungling the hell out of these negotiations. They are harming their authors, first by not informing them of these negotiations back in November when they started, and more recently by not providing information to authors like Michael Sullivan, who wants to know details about book shipments.
Hachette may even be fighting for the agency pricing scheme that landed them and others in hot water with the DOJ. That’s where they set the retail price, and Amazon isn’t allowed to discount. You know, like practically no other retail agreement in any other industry. The reason Hachette wants this? To protect their relationship with bookstore chains, namely Barnes & Noble. I have spoken with publishing heads who have admitted to me that they can’t lower their e-book prices without damaging relationships with brick and mortar stores. Those stores will cease ordering books.
There’s a whole lot more to this game than most people realize. Me? I’m pulling for Amazon as an e-book customer. I hope they win the right to continue to be able to discount e-books so they remain less expensive than paperbacks. Hachette doesn’t want this. Hachette wants higher prices (or at least, for Amazon to take the hit instead of them).
As an indie author, however, I wouldn’t be upset if Hachette got what it wanted. Yeah, price those e-books at $14.99. I’ll keep your readers busy with my books until you come to your senses.
May 25, 2014
It’s BEA time! Book Expo America is the largest US publishing extravaganza. Last year, a handful of crazy indies went in on a booth and had a great time at the Expo. So we’re back and better than ever. If you’re around the Javitz Center and you want to stop by and say hello, our booth is DZ1761. That’s in the Digital Discovery Zone, where all the cool players are.
I’m also involved in a few talks and events around New York this week. On Tuesday, I’ll be at Entwine to give a reading and do a meet-and-greet. Entwine is on 765 Washington Street in the West Village. The shindig starts around 7pm, but I’ll be there early if you want to raise a glass and chat. Please Tweet/FB about this event if you can!
On Wednesday, I’ll be moderating a panel with Bella Andre and Barbara Freethy at the Digital Minds conference. The panel is at 10:50 that morning.
On Thursday, I’ll be at the Author Hub in the Javitz Center at 10am for the ribbon cutting. And between there and our booth the rest of the day. At 2:30 I’ll be signing copies of SAND at table 18 of the author signing area.
Friday, I’ll be around the booth.
On Saturday, I’m on a panel at UPupU at 10am on whether to self-publish or traditionally publish. Should be a subdued panel. Otherwise, this is the day for BookCon, so I’ll be at the booth (DZ1761). Come say hello!
May 21, 2014
A great piece in the Seattle Times this week about how small publishers can thrive and compete thanks to print on demand and the rise of ebooks. In fact, all of the advantages self-publishers enjoy today are just as beneficial for small presses. You can cut out costly returns, print no more books than those you sell, and small presses can build a backlist that stays relevant and fresh for the rest of time.
Late last year, there were a handful of great reports on the health of independent bookstores. Check out this one at the Washington Post and another from NPR. I’ve been following the rise of indie shops for a few years now, back to when I worked in one. And I’m seriously considering opening a bookstore of my own (I blogged about what it would look like here).
It raises the question of who we should be pulling for as the publishing industry pivots and swerves. Not that we need to take sides at all, but I do find it curious that there is more of an outpouring of love and concern for the major brick and mortar chains and the Big 5 publishers than there is for everyone else. Are we rooting for Goliath? I think we are.
Amazon is often seen as the problem. But “Amazon” is a name for technological innovations that were going to happen whether we wanted them to or not. We might as well shake our fists at gravity. A lot of people are going to choose price and selection over any other concern. Which is why major publishers grew so big and why independent shops shuttered in the first place.
I remember going to see You’ve Got Mail in the late 90s. Back then, the giant and the boy with the sling were clear. Now, not so much. One of those boys-with-a-sling moved to Seattle and went from selling books out of his garage to the largest online retailer in the US. The question is, who is he dinging with his river stones?
It occurred to me a few months ago that perhaps we are slaying giants, and we just don’t realize it yet. Customers who prefer low prices and vast selection are now shopping online. The big boxes are hurting (Borders is gone and many pundits are counting the days before Barnes & Noble joins them). Independent bookstores, meanwhile, are seeing roughly 10% growth, year on year, for the past three years. It reminds me of how Yellowstone National Park restored an ecosystem by reintroducing wolves back into the environment. The wolves keep the deer population in check. The deer were rubbing on saplings, which prevents new forest growth and affects dozens of lifeforms downstream. The wolves were the little guy. The adorable deer were the menacing Goliaths.
Our Author Earnings reports have highlighted the strength not just of self-published authors but also of small presses. The digital revolution is making it possible for mom-and-pop publishers to compete on a level playing field. Look at the system we are bemoaning the loss of: It means five behemoth publishers paying tons of money to control which books greet you as you walk into a cavernous space just as much crammed with toys and gifts as actual books. Are we really going to miss this? Or are we going to welcome the return of bookstores that cater to their communities, where local business owners thrive, and where thousands of individual presses support a lot more authors.
Hollywood’s blockbuster model of low-risk re-makes and sequels has been working its way into publishing, and that has not been a good thing. That is another Goliath being slayed. Replacing this is a world in which every rural town, no matter how small, has a digital bookstore in each living room, bedroom, and pocket. Replacing this is a world in which anyone can hone their craft, publish their works, and find a reader or two. Replacing this is the rise of independent bookstores, the rise of reading, the rise of literature, the rise of working-class writers, and the rise of all those myriad publishers who in a previous age were conquered and consumed by what we now call the Big 5.
Don’t get me wrong, I hope the major publishers survive. The world can’t have enough Davids.