Barry Eisler

Thursday, July 03, 2014

One-Percent Authors Want To End Destructive Conflict, Bring Order to the Galaxy

Just when I thought Amazon Derangement Syndrome couldn’t get any more acute, I woke up to this “letter to our readers” spearheaded by bestselling writer Douglas Preston and signed by 69 authors.  One day, historians and psychologists might manage to explain how various authors came to fear and revile a company that has sold more books than anyone in history; that pays authors up to nearly six times the royalties the New York “Big Five” lockstep rate; that single-handedly created the ebook and self-publishing markets; that offers more choice and better prices to more readers than anyone ever has before; and that consistently ranks as one of the world’s most admired companies.  But for now, let’s see if we can figure it out ourselves...

A letter to our readers:

Amazon is involved in a commercial dispute with the book publisher Hachette, which owns Little Brown, Grand Central Publishing, and other familiar imprints.

Unmentioned is that Hachette is part of the Lagardère Group, a French conglomerate with sales of something like ten billion dollars a year.  Not exactly David to Amazon’s Goliath.

These sorts of disputes happen all the time between companies and they are usually resolved in a corporate back room.

Indeed, Amazon and Hachette are just a retailer and a supplier having trouble coming to terms.  Something that couldn’t be more common.  Unless, unless...

But in this case, Amazon has done something unusual. It has directly targeted Hachette’s authors in an effort to force their publisher to agree to its terms.

This is misleading.  Not only has Amazon not “targeted Hachette’s authors,” it has offered to compensate them for any damage they suffer by virtue of their publisher’s dispute with Amazon.  Hachette has refused that offer.  Do the authors of this letter not know about Amazon’s offer to help compensate Hachette’s authors, and Hachette’s refusal?  Why don’t they mention it?

For the past month, Amazon has been:

--Boycotting Hachette authors, refusing to accept pre-orders on Hachette’s authors’ books, claiming they are “unavailable.”

Amazon is not boycotting anyone.  All books by all Hachette authors are available in the Amazon store.  In the face of this, to claim there’s a “boycott” is either ignorance or propaganda.

Not including a preorder button for a tiny percentage of titles isn’t a boycott.  It’s a shot across the bow, and a fairly mild one compared to what an actual boycott of all Hachette titles would look like.  As for “unavailable,” if a book isn’t published yet and you can’t preorder it, how else should its status be described?

--Refusing to discount the prices of many of Hachette’s authors’ books.

The prices of Hachette’s books are set by Hachette.  If the authors of this letter think those prices are too high — and apparently, they do — it’s bizarre that they’re blaming Amazon.

--Slowing the delivery of thousands of Hachette’s authors’ books to Amazon customers, indicating that delivery will take as long as several weeks on most titles.

When a retailer and supplier can’t come to terms — something the letter’s writers acknowledge happens “all the time” — what is the retailer supposed to tell its customers?

As writers—some but not all published by Hachette—we feel strongly that no bookseller should block the sale of books or otherwise prevent or discourage customers from ordering or receiving the books they want.

This is a bit rich.  My own Amazon-published titles are boycotted by Barnes & Noble and by many indie bookstores.  Tens of thousands of Indie-published authors face the same widespread boycott.  An actual boycott, as in, outright refusal to stock books written by these authors — not because of price or other contractual terms, but simply because the retailers in question don’t like these authors’ way of publishing.  Yet this is the first I’ve heard any of the letter’s authors express their strong feelings on bookstores preventing or discouraging customers from ordering or receiving the books they want.

What’s really weird, when you stop and think about it, is that if customers being able to read the books they want is really an important value for the letter’s authors, you would think they would love Amazon’s business model and find Hachette’s suspect.  After all, Hachette is a gatekeeper — their whole business model is predicated on excluding from readers probably 99.99% of manuscripts.  Amazon’s model is to let all authors publish and to trust readers make up their own minds.  If customer choice is the real value in play here, you can’t coherently support Hachette and decry Amazon.

Unless, of course, all that happy talk about customer choice is a canard.

It is not right for Amazon to single out a group of authors, who are not involved in the dispute, for selective retaliation.

It wouldn’t be right if Amazon were doing it.  As explained above, they’re not.  What I’d like to know is why the letter’s authors apparently feel it is right when Barnes & Noble and other booksellers really do single out authors for retaliation?  Why are they upset about a fictional Amazon boycott, and sanguine about a real Barnes & Noble one?

Moreover, by inconveniencing and misleading its own customers with unfair pricing and delayed delivery, Amazon is contradicting its own written promise to be “Earth's most customer-centric company.”

I agree that it’s an inconvenience for customers when a retailer and supplier can’t come to terms.  But it happens, and it’s not that hard to understand why a retailer might feel compelled to hold the line in one discrete area to prevent its supplier from forcing it to charge higher prices across the board.  Think of it as a “lesser of two evils” dynamic a retailer might face with regard to what’s best for its customers.  Regardless, I’m not sure why the letter’s authors reflexively lay blame for the dispute and its consequences at Amazon’s feet while reflexively absolving (and refusing even to question) Hachette.  And I don’t see Amazon doing anything here that I would characterize as “misleading.”

All of us supported Amazon from when it was a struggling start-up. We cheered Amazon on. Our books started Amazon on the road to selling everything and becoming one of the world’s largest corporations. We have made Amazon many millions of dollars and over the years have contributed so much, free of charge, to the company by way of cooperation, joint promotions, reviews and blogs. This is no way to treat a business partner.

Under the circumstances, that last line sounds like projection.

Nor is it the right way to treat your friends.

I’m not sure what this means.  What does friendship have to do with a retailer and supplier negotiating terms?  Are they saying that in a contract dispute, you can’t allow your friends to become collateral damage?  Okay, but why is that message directed at Amazon and not at Hachette?

I know, I know... they really just want to end this destructive conflict, and bring order to the galaxy...


Bear in mind that no one outside of Amazon and Hachette even knows for sure the details or their discussions.  There’s been a lot of informed speculation in the blogosphere, and it seems likely that the essence of the dispute is that Hachette wants to return to “agency” pricing, which enables Hachette to keep the prices of ebooks artificially high, while Amazon wants the flexibility to charge less.  But in the face of no knowledge, or of the likelihood that Hachette is trying to force Amazon to charge higher prices, the knee-jerk anti-Amazon response isn't easy to understand.

Without taking sides on the contractual dispute between Hachette and Amazon, we encourage Amazon in the strongest possible terms to stop harming the livelihood of the authors on whom it has built its business.

Well, that made me smile.  I’m glad no one is taking sides!  In fact, reading their letter, I still have no idea which side the letter’s authors favor… :)

But seriously, I have to ask… do these people really not recognize that they’re taking sides?  Not that I think taking sides is wrong; personally, I think Hachette is a joke and I side with Amazon because I favor lower prices, higher royalties, and more choice.  But to write a letter like this and claim you’re not taking sides… are they disingenuous?  Or are they so psychologically wedded to legacy publishing that they think taking Hachette’s side is just being neutral?

For some reason it reminds me of the joke:  “If we’re not supposed to eat animals, why are they made of meat?"

But anyway… if the value in play here is that a company should "stop harming the livelihood of the authors on whom it has built its business,” I’m gobsmacked that these people aren’t demanding more from Hachette.  Hachette pays its authors 12.5% in digital royalties.  It keeps the lion’s share of increased ebook profits for itself.  It demands life-of-copyright (that is, forever) terms of license.  It inhibits its authors' ability to publish other works by insisting on draconian anti-competition clauses.  It pays its authors only twice a year.  It has innovated precisely nothing, ever, preferring to collude to fix prices with Apple and the other members of the New York “Big Five.”  That’s Hachette’s business record… and these authors, who purport to care so much about a company harming the livelihood of authors, have nothing to say about it?

I guess that’s what they mean by “not taking sides."

None of us, neither readers nor authors, benefit when books are taken hostage.

Then why aren’t they telling Hachette to set their books free?  End agency pricing!  Let retailers discount!  Don’t collude!  Free those books!

(We’re not alone in our plea: the opinion pages of both the New York Times and the Wall Street Journal, which rarely agree on anything, have roundly condemned Amazon’s corporate behavior.)

I always mistrust this kind of assertion in the absence of links or other citations — especially coming from a group that has already made as many misleading claims as this one.  But let’s assume their claim about overlapping op-eds is true.  The New York Times and Wall Street Journal "rarely agree on anything”?  This is possibly the most thoughtless (or misleading) claim the letter’s authors have made yet.  I know it’s a bit discursive, but here’s Noam Chomsky on propaganda:

"One of the ways you control what people think is by creating the illusion that there's a debate going on, but making sure that that debate stays within very narrow margins. Namely, you have to make sure that both sides in the debate accept certain assumptions, and those assumptions turn out to be the propaganda system. As long as everyone accepts the propaganda system, then you can have a debate.”

Like the Democratic and Republican branches of America’s single political party, the New York Times and Wall Street Journal have far, far more in common than they do in dispute.  Suggesting their concurrence on a topic is meaningful is exactly like suggesting that because majorities of Democrats and of Republicans voted to invade Iraq, the war was a good idea.

We call on Amazon to resolve its dispute with Hachette without hurting authors and without blocking or otherwise delaying the sale of books to its customers.

I know I’m repeating myself, but… it’s fascinating that these people — who are of course not taking sides! — are calling on Amazon this way and saying nothing at all to Hachette.  You’d think Hachette is a wholly pure and innocent child, lacking any autonomy at all in this business dispute.

We respectfully ask you, our loyal readers, to email Jeff Bezos, c.e.o and founder of Amazon, atjeff@amazon.com, and tell him what you think. He says he genuinely welcomes hearing from his customers and claims to read all emails from this account. We hope that, writers and readers together, we will be able to change his mind.

It’s sad.  Imagine the good that might be accomplished if mega-bestselling authors like Child, Patterson, and Turow were even fractionally more inclined to leverage their fame and fortune in calling attention to real injustices in publishing.  The pittance the New York “Big Five” (the cartel is right there in the moniker) pay their authors.  The industrial-level scamming of newbie writers by Penguin Random House-owned Author Solutions.  Harlequin setting up subsidiaries solely to screw writers out of their royalties.

Instead, these one-percenters consistently ignore the tremendous good Amazon has done for all authors, and allow misguided self-interest to distort their perceptions and their arguments.  They take full-page ads in the New York Times, they give interviews with an adoring press, they publish letters like this one… all to perpetuate a publishing system that is designed to create a one-percent class of winners and to exclude everyone else.


You want to know something else the New York Times and Wall Street Journal are going to agree on?  They’re going to offer a ton of coverage to this “letter to readers” because it was signed by a few superstars.  And they’re going to ignore a competing petition that in the few hours since it went live is already closing in on a thousand signatures, many of them submitted by the mom-n-pop, small-business, indie authors Amazon has enabled to earn a living from their writing for the first time ever.  This imbalance is the way establishments work, and the authors of the “letter to our readers” are nothing if not part of the publishing establishment they seek to perpetuate.

It’s all right.  The establishment has the names.  Freedom and choice have the numbers.  And the numbers always win in the end.

Oh, and that petition?  You can add your name here.

P.S.  Some further suggested reading on this topic.




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19 Comments:

Blogger Rob Gregory Browne said...

Come on, Barry, stop making sense. Nobody likes that.

Thursday, July 03, 2014 11:58:00 AM  
Blogger Pam Stack said...

Mad, well done blog.

Thursday, July 03, 2014 12:12:00 PM  
Blogger 125records said...

I can understand why some authors don't like Amazon -- from what I've heard, they feel it's unhealthy for one retailer to have so much power in the marketplace -- but what I truly, truly don't get is the writer of this petition complaining about Amazon NOT DISCOUNTING. I mean, the price of the book is printed on the dustjacket, right? And why would anyone expect a retailer to discount a product all the time? Lay's potato chips have the price printed on the bag, and Safeway may offer them on sale this week for $1.99 despite the fact that the price on the bag is $3.99, but I don't get outraged when they go back up to $3.99.

Thursday, July 03, 2014 12:14:00 PM  
Blogger Talia Poppy said...

They've got perception management nailed. I spent nearly four years in High Court litigation with Hachette because of their aggressive bad practice and dishonesty with the way they tried to destroy my book and reputation, ending with an agreed settlement. Hideous. I learnt a lot along the way about corporate psychopaths.

Thursday, July 03, 2014 12:38:00 PM  
Blogger William Ockham said...

We may not know the details of the negotiations but we know what Hachette told its investors in May. One of their top strategic priorities was:

Retain control over ebook pricing

Last year, they told the federal court in their antitrust case that they intended to re-institute non-discount agency pricing as soon as possible. That means sometime after September of this year.

Thursday, July 03, 2014 3:33:00 PM  
Blogger Bridget McKenna said...

Thanks for bringing reason to a lop-sided debate. An alarming number of writers I know reflexively back Hachette (and by extension the rest of the legacy publishing industry). It's not that they don't know they're being screwed--most of them are quite aware of it--but they believe in the myths and in the idea of the gatekeepers who protect readers from all those bad indie books. In fact, a writer of my acquaintance just said as much in a Facebook post. Getting screwed (and not being bought breakfast the next morning) is an acceptable part of the price they pay to be "real" authors.

I even sort of understand their masochistic attitued. I've been a "real" author, and no, I didn't get taken out to breakfast. The kind of validation legacy publishing offered me wasn't what I needed, though I continued to think for many years that it was. Glad that's over, and that's in large part because of you, Joe, and many of the other voices crying out in the wilderness. Keep on crying out for all of us.

Thursday, July 03, 2014 4:31:00 PM  
OpenID michaelpatrickhicks.com said...

Excellent analysis, Mr. Eisler; very well done! I don't understand the complaint about the lack of discounting during this dispute either. So, their books cost the same amount as what's printed on the dust-jacket and customers would have to pay the same amount at Amazon as they (maybe) would at a local indie bookstore? At least Amazon has encouraged its customers to look elsewhere for these titles during the dispute, thereby showing that their customers are still at the forefront. It also nicely dispels the myth that Amazon is a monopoly, what with their being several other booksellers to turn to... If the authors want cheaper books, maybe the need to talk to their publishing house about it.

Thursday, July 03, 2014 5:42:00 PM  
OpenID samulraney said...

Well said, Barry. It's important that high-profile indies like you, Joe, and Hugh make your voices heard. It might feel like screaming into the wind sometimes, but there are a lot of us out here listening and cheering you on and trying to echo your sentiments to those that will listen. Keep up the good work.

Thursday, July 03, 2014 5:45:00 PM  
Blogger BelleBooks said...

The Hugh Howey Exaggeration and Hyperbole Club now has a Vice President. I'm sorry for the writers who have so little information about the publishing industry that they believe this horseshit. They're being led down a dark road.

Thursday, July 03, 2014 7:24:00 PM  
Blogger Paul Schilling said...

Great article. When I read articles about the publishing industry I feel like a guy on the street in a Godzilla v. King Kong movie, just running away and hoping not to get stomped on.

Friday, July 04, 2014 4:56:00 AM  
Blogger Kel Brown said...

I think there’s a great fear that if we all (authors & publishers) don't stand against Amazon now then we’ll all be helpless when Bezos straps on the Hugo Boss and comes for us in the night.

It's probably going to happen, not the Hugo Boss and the Amazon Gestapo, but the royal clawbacks and encroachment of control but it's not something we need to fear given that market and distribution of ebooks has already taken hold. There might be a dark age, measured in internet time, before competition overcomes Amazon's size and market control (think Microsoft in the 90s) but it won't be nearly as long (~15 years for MS). If we don't DRM our books it'll be that much shorter.

Fear, especially one grounded by rational (and an equal number of rhetorical) arguments (monopolies are bad, Amzn owns a large chunk of the market, amazon.com 's first and still working domain was relentless.com ;) , etc) are hard to overcome and I think that's why a lot of the trad pub authors, especially the successful ones, are fighting against Amazon (that and self-interest but I'm trying to be generous).

Friday, July 04, 2014 8:16:00 AM  
Blogger Douglas Bornemann said...

Wow, BelleBooks, that's an interesting take. I don't yet have a horse in this race, but I've been following both sides with interest. So far, all the convincing arguments in this dispute have been in favor of Amazon. Do you have facts or arguments to support your position, because if you do, I'd be genuinely interested in hearing them. If not, then aren't you guilty of the same shady practices you are accusing Barry of engaging in?

Friday, July 04, 2014 9:15:00 AM  
Blogger Tom Maddox said...

--Refusing to discount the prices of many of Hachette’s authors’ books.

I love this amazing bit of hypocritical logic.

Now: We hate that amazon is not discounting our books.

2 years ago: We need the Agency model to stop Amazon from discounting our books.

Friday, July 04, 2014 9:31:00 AM  
Blogger Chris Meadows said...

I've got too big a sense of entitlement to be taken in by anything Preston says. :P

Friday, July 04, 2014 10:07:00 AM  
Blogger Barry Eisler said...

Thanks for all the thoughts, everyone.

Kel Brown said, "I think there’s a great fear that if we all (authors & publishers) don't stand against Amazon now then we’ll all be helpless when Bezos straps on the Hugo Boss and comes for us in the night."

I do understand why authors might be wary of Amazon. What I don’t understand is how authors can be wary about what Amazon might hypothetically do in the future, and sanguine about what legacy publishers are actually doing right now. For more on this:

http://jakonrath.blogspot.com/2011/10/guest-post-by-barry-eisler.html

Chris, that link is fascinating. I've encountered the "But publishing has always used windowing, for example with hardbacks and paperbacks" argument before. My response is this:

Yes, legacy publishers have always relied on windowing, simply because they can. But can doesn't mean should. The legacy industry model is designed to force customers to buy something they don't want (the hardback) by holding back what they do want (the paperback, the ebook). If this were untrue, both formats would be released immediately. But legacy publishers know that if the paperback were available immediately, lower-margin paperback sales would cannibalize higher-margin hardback sales.

So if you have enough market power, you obviously can build a business predicated on preventing your customers from buying what they want and forcing them to buy what you want. But I prefer a more enlightened form of self-interest: I prefer to figure out what my customers want, then figure out a way to get it to them.

In other words, justifying windowing X because we've always had windowing Y is incoherent. No matter where it occurs, from the customer perspective windowing is a crap business model. In fact, the very name "windowing" is just a gentle euphemism for "exploiting rather than serving customers."

Friday, July 04, 2014 12:25:00 PM  
Blogger Laurence O'Bryan said...

Barry,

An excellent and logical post. You are 100% right about this dispute. I am both traditionally Big 5 published and I support indie authors worldwide seeking discovery through our site BooksGoSocial.com.

Here in Ireland there are lots of discarded traditionally published authors desperate for ways to reach readers they no longer have access to because they failed to meet some arbitrary target set by a Big 5 publisher. All authors should support Amazon. Amazon provides a free market for all authors seeking readers. Any attempt to maintain the elitist publishing model, which casts aside good authors every year, must be fought tooth and nail.

Only one thing distinguishes the appeal from the one percent of authors: naked self interest. Keep up the good work, Barry!

Saturday, July 05, 2014 10:08:00 PM  
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Sunday, July 06, 2014 11:39:00 PM  
Blogger Jack O'Melia said...

FWIW, there's a NY Times article about Amazon again reaching out to Hachette authors. The comments were so bad I posted a link to your blog. Hope you don't mind ;)

Tuesday, July 08, 2014 5:09:00 PM  
Blogger Keith Davis said...

Barry has left out a very important part of this story. Amazon and Hatchette are negotiating because of a court order to do so. Last year Hachette and the others of the Big 5 (and Apple) were convicted of felony price fixing on ebooks. They were ordered to pay consumers $120 million back for illegally overcharging them, and ordered to renegotiate ebook contracts under court supervision. He ordered Hachette and Amazon to go first. Amazon has made three offers to Hachette. Has has never responded. In fact, Hachette's response was to quit resupplying Amazon's fulfillment centers with paper books. When Amazon's supplies ran out they had no choice but to remove the books from Prime and tell customers that Hachette would deliver. Hachette's never delivered. Amazon refunded those purchases and removed the BUY button from the book, replacing it with a "Click HERE to sign up for an email alert when the book is again available". All standard practice for widget and fleen sellers too. Unable to get any response concerning shipping or their proposal, Amazon had no choice but to remove the pre-publication sales buttons for books they had no reason to believe would be delivered. As for discount - those have always come out of Amazon's share of the sale - it's done strictly for market research, not because they think Dougy Preston is great guy.

Friday, August 15, 2014 9:37:00 PM  

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