Thursday, July 10, 2014

Amazon Cancer Cure a Stunt to Separate Patients from Healthcare Providers

From the beginning, the Amazon/Hachette dispute has functioned as a kind of inkblot test.  The parties’ negotiations are subject to a confidentiality agreement, so no one outside Amazon and Hachette knows for certain the details.  But vagueness and ambiguity hasn’t much impeded the reflexively anti-Amazon crowd from being certain that Amazon’s tactics are “bullying,” “monopolistic,” “malignant,” “evil,” etc.  Most of all, in the face of confidential negotiations about which the outside world can only speculate, how many people have been certain that it was Amazon’s position and tactics that were hurting authors, while never even considering the possibility that the other party to the negotiation might bear at least some degree of responsibility, as well?

The reflexive anti-Amazon reaction is even stranger when you consider that, based on everything we know about their business strategies, it seems likely that in general Hachette has been holding out for the ability to maintain higher ebook prices, while Amazon has been holding out for the ability to discount.  Higher ebook prices aren’t just bad for readers; they tend to hurt authors, too.  In the face of (1) we don’t really know what the dispute is about; and (2) it’s probably about Hachette doing things that are bad for readers and writers, a martian might be perplexed about why some authors and a lot of the media would reflexively cheer Hachette and vilify Amazon.

(In fairness, though, it seems that Amazon has over 12 times the number of supporters in this dispute as Hachette -- the petition to Hachette now has just shy of 7000 signatures, to about 550 for the one to Amazon.) 

The answer, I think, has to do with establishments and how they view opposition.

Establishments are actually pretty tolerant of opposition — as long as they sense it’s opposition within the establishment.  Opposition to the establishment is another matter.  I think this dynamic explains, for example, the quite different establishment reactions to the journalism of Bart Gellman and Glenn Greenwald.  Both have broken huge stories on the NSA’s blanket warrantless surveillance on American citizens, yet Gellman is extended various journalistic courtesies while Greenwald is attacked as an activist, advocate, blogger, enabler, porn-spy (no, I don’t know what that means, either), co-conspirator, enabler, collaborator, and traitor.  I think the difference can be explained by the establishment’s sense (right or wrong) that Gellman offers opposition within the system, while Greenwald is opposed to the system itself.  The first can be tolerated.  The second cannot.

If my theory has any merit, it might explain why Amazon is being pilloried for a “boycott” that’s not even a boycott, while B&N largely received a pass for using similar tactics a few years back against S&S authors, and while few people even question the very real boycott B&N and indie booksellers impose on tens of thousands of Amazon-published and self-published authors.  When B&N (ironically, yesterday’s villain, but today we’re at war with Eastasia) does it, it’s rough tactics but within the system.  Ditto indie booksellers.  But if you’re perceived as oppositional to the system rather than fundamentally supportive of and dependent on the system, then almost everything you do will be interpreted with unique suspicion and hostility.

I know all this, but even so I was astonished the other day at the hostility from some quarters that greeted Amazon’s offer to try to compensate Hachette authors for whatever damage those authors have suffered during Amazon’s and Hachette’s contentious contract negotiations.  Amazon has been widely blamed (without a sound basis, as I’ve argued) for using Hachette authors as negotiating pawns and turning them into collateral damage.  Amazon has repeatedly expressed regret that any authors might suffer from the Amazon/Hachette impasse, and proposed that Amazon and Hachette give all revenues from Hachette ebooks to Hachette authors until the impasse is resolved.  On its face, it seems a pretty elegant solution:  not only protection from collateral damage, but an outright windfall for Hachette authors; an ongoing loss for Amazon and Hachette that would incentivize the companies to come to terms more quickly.  But Hachette instantly rejected the offer out of hand (as they did Amazon’s previous offer to contribute 50/50 to an author compensation pool), and the offer was dismissed by Hachette’s defenders as at best an Amazon PR stunt.

So… I have a question.

What if Hachette had proposed the very same thing — all digital revenues to Hachette authors until we resolve this thing — and Amazon had rejected it?

Of course I can’t prove it, but I’m pretty sure the reaction among the reflexive anti-Amazon crowd would have been, “Hachette proves how much it cares about authors, while Amazon continues to use authors as mere pawns and collateral damage!”  “Hachette is trying to shield its authors with its own body but Amazon won’t stop shooting!”  And other such interpretations.  Sometimes I think it’s reached the point where if Amazon invented and gave away for free a cancer vaccine, the establishment soundbite would be, “Amazon Cancer Cure a Ploy to Separate Patients from Healthcare Providers."

I don’t know the formal name for the logical fallacy whereby X is proof of Y and the opposite of X is also proof of Y (if you do, please tell me in the comments).  But if you decry something when Amazon does it but would cheer for it if Hachette does it, it might be worth taking a step back and reflecting on where your opinions are really coming from.

Obviously, the kind of double standard I’m talking about isn't limited to publishing.  In fact, it’s much more common in politics, where many “conservatives” were against foreign nation-building until Bush decided he would be a nation-building president, and many “liberals” were against warrantless surveillance, indefinite imprisonment, and imperial wars until Obama adopted those policies as his own.  One of my personal favorite examples of the mentality was a guy I engaged about a year ago on Twitter.  He claimed Snowden leaked the NSA documents because he craved attention for himself.  I responded that Snowden had refused to give even a single interview beyond the first one with Glenn Greenwald and Laura Poitras, despite having been invited by every top-rated television host in the world.  "Oh no," the guy responded without missing a beat, “that’s his strategy.  Hold it all back, and then later it’ll be like a dam bursting.  Super mega attention.”

Do you see the problem with that?  If Snowden gives interviews, it proves he craves attention.  If he doesn’t give interviews, it proves he craves attention.  Logically, one of these things could be proof of the “he craves attention” hypothesis.  But not both of them.

This is probably a good place to explain what I mean when I sometimes refer to “Amazon Derangement Syndrome.”  I’m not referring to all criticisms of Amazon, or even to most.  For example, I think Amazon’s cutting off Wikileaks from Amazon Web Services at Joe Lieberman’s request was pernicious, shameful, and cowardly.  I’m glad there’s media scrutiny of conditions in Amazon warehouses.  And while still far better than anything I’ve ever seen in the legacy world, Amazon Publishing’s contracts are showing increasing legacy-like lard and legacy-like author-unfriendly clauses.  Certainly I don’t think these criticisms are deranged — after all, I’ve made them myself.

Instead, I’m talking about a species of “damned if you do, damned if you don’t” criticisms.  A quick example:  a few years ago, the Seattle Times ran a series of articles that I thought were, if not deranged, then at least seriously unbalanced.  In one, the reporter observed that Amazon had purchased lots of downtown office space, but had nefariously hidden the purchases by choosing not to put Amazon signage on any of the buildings!  I chuckled when I read it, because I was pretty sure that, had Amazon put out the nefariously missing signage, the headline would have read, “Amazon Flaunts New Dominion of Downtown Real Estate.”

What does that mean?  It would seem to mean that no matter what Amazon does, it’s proof of the company’s evil.  No matter what might be at issue (and again, with regard to Hachette, we don’t really know), if Amazon has a dispute with a legacy publisher, Amazon must be wrong and the legacy publisher must be right.  And the only thing Amazon can do to become right in turn is to toe the legacy line.

That’s not logical thought.  It’s religious dogma.  Probably not a coincidence, then, that Hachette defender Douglas Preston describes a business dispute with a “blood money” religious reference, or that an unhinged Panda writer outright called Amazon’s offer “30 pieces of silver” with authors as “Hachette’s personal Judas.”  I’m not saying these people view Hachette authors literally as the apostles and Hachette literally as Jesus Christ.  But they do seem to think the author/publisher relationship properly goes far beyond just business.  For the references to be coherent, there has to be a perception of a substantial degree of intimacy, even of sacredness, in these relationships.  Meaning, apparently, that by not buying into the faith, Amazon must be committing heresy.

I have to add at this point… it’s a little weird under the circumstances that I get accused of being an Amazon “shill” or of harboring “unconditional love” for the company or of supporting the company because “Amazon feathers my nest.”  Unlike, say, James Patterson, who profits enormously from the establishment publishing system and so might be expected to want to preserve it out of self-interest, I don’t have much of a dog in the Amazon/Hachette fight.  I’ve gotten back the rights to all my legacy-published books, so everything I have is now either self- or Amazon-published.  Meaning that, however the Amazon/Hachette standoff ends, the outcome doesn’t affect me.  If anything, you could argue that self-published authors, were they motivated by self-interest, would be cheering for Hachette, because Hachette stands for higher legacy prices which indie authors can more easily undercut.  If you look at the rhetoric and the incentives, it's pretty hard to make a coherent argument that Amazon- and self-published authors are motivated by self-interest here, but easy, if that's your bag, to make such an argument with regard to, say, Doug Preston and James Patterson.

So some of the “You’re an Amazon shill!” stuff, doubtless, is projection.  But some of it is a fascinating reflection of one of the essential qualities of any establishment:  privilege.  Let’s talk a little about that.

The essence of any establishment is a sense, sometimes conscious but usually not, of privilege.  Of course there are different rules for the establishment class and for everyone else; that goes without saying.  But to the establishment these different rules don’t feel like a double standard because the establishment deserves and indeed requires different treatment.  Often, these “differences" get their own distinct nomenclature.  So, for example, they torture; we employ enhanced interrogation techniques.  They have gulags; we have detention centers.  When we invade a country halfway around the world, it’s called “Iraqi Freedom;” when Iran funds an Iraqi politician next door, it’s “meddling.”  Leaks that serve power are "news;" leaks that challenge power are "treason" and prosecuted under the Espionage Act.

(You could write whole books on this and related topics, and indeed, Glenn Greenwald and Matt Taibbi have — I recommend With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful and The Divide: American Injustice in the Age of the Wealth Gap.)

I’ve written about this kind of mentality before — once, in response to some criticisms that my novella London Twist was too “pro-gay” because of a lesbian sex scene (alas, I’ve yet to be criticized for being too pro-straight because of my straight sex scenes); another time, in response to NPR’s insistence that I not name any establishment figures in an article about the continued relevance of Orwell’s Nineteen Eighty-Four.  The implicit outlook might usefully be summarized as "Your politics are political; mine are just pragmatism and common sense."

Obviously, double standards that don’t feel like double standards are to one degree or another widespread, and probably even universal.  We’re just wired as humans to give ourselves and our in-groups the maximum benefit of the doubt.  I don’t think it’s a tendency that can be eradicated, but it can be mitigated with logic and honest reflection.  Which is why I’ve written this post.  Doing so helps me examine my own biases; and, hopefully, will encourage others to do something similar.  To that end, may I ask a few respectful questions of anyone who immediately criticized Amazon’s compensation offer the other day?

1.  If the offer was just a PR stunt, why didn’t Hachette call Amazon’s bluff?

2.  If you believe Hachette can’t afford to temporarily give all its Kindle revenues to its authors, have you considered that Hachette is part of the Lagardère Group, a multinational with something like ten billion dollars a year in sales?  That Kindle sales represent only one percent of Lagardère’s annual sales?  When someone tells you she can’t afford to temporarily forgo one percent of revenue, do you typically interpret that “can’t” as a “won’t”?  And if so, why are you so quick to take Lagardère’s “can’t” at face value?

Also, would you offer Amazon the same immediate benefit of the doubt if the shoe were on the other foot?  If Hachette had made this offer and Amazon had instantly responded, “Sorry, our margins are extremely slim and we can’t afford this,” would you shrug and say, “Makes sense to me?”  If not, why the different standard for Hachette?

3.  If you thought the offer was unfair because only 30% of the burden would fall on Amazon and 52.5% on Hachette (people claiming that 70% would fall on Hachette were overlooking the fact that Hachette pays its authors 17.5% digital royalties, but still, yes, 52.5% is more than 30%), why haven’t you encouraged Hachette to counteroffer?  Indeed, why haven’t you encouraged Hachette to accept Amazon’s previous, 50/50 offer?  Did you even know about that earlier offer?  Do you think Hachette might in fairness have at least apprised its authors of the offer's existence?

4.  In its offer, Amazon described in great detail how long Hachette has been dragging its feet in negotiations.  Do you think any of that is noteworthy?  Do you think Hachette’s delay tactics are well-calculated to protect its authors?  Would you feel differently about those tactics if Amazon were the one engaging in them rather than Hachette?  If so, why?

5.  If you believe Amazon’s offer is disingenuous because Amazon has less to lose, have you considered another way of looking at it?  Namely, Amazon has little to lose per book because it offers such steep discounts to its customers, while Hachette has more to lose per book because it takes such a steep share of digital revenues from its authors.  An imbalance might exist, so far as it goes, but is it one you think ought to be used as an excuse for Hachette’s refusal of Amazon’s offer?

6.  If Doug Preston feels as he claims that he has a moral obligation to share his revenues with Hachette and so can’t accept Amazon’s “blood money,” why not encourage Hachette to accept the offer and then voluntarily share the windfall with Hachette?  There would be more money for everyone:  Amazon would offer full discounts again, would reinstall preorder buttons, and would stock full quantities of paper books.  Best of all, there’s precedent:  the Sanhedrin priests decided it was moral to accept Judas’s return of his blood money as long as they used it to purchase the potter’s field.  If it was good enough for the high priests, surely it’s good enough for Hachette authors?

7.  More broadly, is there anything Amazon could do in its dispute with Hachette, short of outright capitulation to whatever Hachette is demanding, that would satisfy Amazon’s critics?  Preston has proposed nothing.  Watch him here, and listen to his description:  “We don’t know exactly what the dispute is [which is itself pretty amazing, considering the opinions he’s nonetheless willing to offer]… All we’re saying is please don’t hurt us… Please, Amazon, can’t you resolve this dispute like two large corporations without involving and hurting authors?  We’re not for Hachette, either [that’s why all my pleas are all directed exclusively at Amazon]… We just want Amazon to stop targeting and retaliating against authors…"

So Preston “just wants Amazon to stop targeting and retaliating against authors.”  Amazon offers to turn over all its revenues to those authors.  And Preston responds that this won’t work.  Okay, fine, then what will?  The “Authors Guild” has proposed nothing.  In fact, "Authors Guild" president Roxana Robinson opined that the Amazon offer "seems like a short-term solution that encourages authors to take sides against their publishers.  It doesn't get authors out of the middle of this – we're still in the middle.  Our books are at the center of this struggle.”

Respectfully, what does that even mean?  If your books are in the middle and that’s a problem, wouldn’t Amazon’s offer be a solution?  But Robinson doesn’t address this question.  She just talks around it.

(By the way, shame on Publisher’s Lunch for offering pointless, pernicious, promiscuous anonymity to the unnamed “Hachette executive” quoted in that article.  Amazon’s executives are all on the record, and Publisher's Lunch offers anonymity to Hachette executives…. why, exactly?  Are they whistleblowers?  Do they fear retaliation from Amazon?  This kind of anonymity is unworthy of anyone who takes journalism seriously.)

And Hachette has proposed nothing, either.  Can anyone here do better?  The 50/50 compensation offer was ignored, the “let’s just turn over all digital revenues to Hachette authors” is inadequate… what, aside from capitulation to terms that he admits he doesn’t even know, would satisfy Preston?  If anyone has a more creative approach than what Amazon has already proposed and the ciphers emerging from Presont, Robinson, Hachette, and the rest of establishment publishing, I’d be curious to hear it.

Here’s about the fairest way I could describe the pro-Hachette position if I were to ignore Hachette's foot-dragging and some other aspects of the dispute:

“Look, Barry, it’s true that Hachette might have accepted Amazon’s previous offer or its most recent.  Or it could have treated those offers as opening gambits and tried to negotiate something even more favorable rather than automatically rejecting them.  And yes, it’s true that had Hachette done so, its authors would have been better off — but only in the short term.  Because in accepting Amazon’s short-term offer, Hachette would have been eroding its long-term negotiating position.  Which would mean that in the long term, Hachette’s authors would be worse off.  So Hachette had to make the difficult choice between the lesser of two evils:  refuse an offer that would have been a boon to Hachette authors today in order to protect them tomorrow.”

I think that characterization is exceptionally charitable to Hachette, but it’s not crazy, either.  But in fairness, doesn’t it apply to both sides?  There’s no question that in the face of Amazon’s latest offer, Hachette is taking a position that results in short-term harm for its authors as the price the company feels it has to pay for a longer-term gain.  Similarly, Amazon would prefer to come to terms with Hachette quickly to prevent any harm to Hachette authors, but believes that capitulating now would result in a longer-term loss.  How can you excuse Hachette from being willing to place authors in harm’s way in the service of some strategic gain, while castigating Amazon for at worst the very same thing?

You can only do so if on some implicit level you believe Hachette’s tactics are somehow sanctified by Hachette's insider status, while believing Amazon’s are illegitimate because Amazon is a publishing outsider.  As in usual in these matters, the people who hold such views don’t recognize them as double standards.  Which only makes them more insidious.

I guess what it comes down to is this.  Online book-selling and digital books have fundamentally changed the publishing industry.  There are people who welcome that change.  And there are people who are intent on stopping it.  The people who welcome the change don’t look at one side or the other as more or less legitimate.  The people who are trying to stop that change are a bit less even-handed.  But that’s to be expected — the essence of establishment privilege is blindness to its existence.


Bob said...

The reality is that authors are bringing a knife to a gun fight. While I have found Amazon to be many times more author friendly than any of the Big 5 during my 20 years with them, neither side particularly cares much about the individual author in the bottom line. This is about much bigger objectives for both corporations.

As you note, indies should actually be rooting for Hachette. I realized a while back that offering suggestions on how trad publishing could do business better was handing bullets to my competition. Let them stay bloated, inept and backwards looking. Less competition.

Also, Preston makes an interesting point that makes almost all other points being made worthless: we really don't know exactly what is being fought over. I speculated on my blog that it's about POD in the long term, which hardly anyone is talking about. What's curious is why there is so much fighting when we all have the same goals: sell stories to readers.

I surmise the problem is this: traditional publishing never really focused on the end result of selling books to readers. They focused on distributing books to consignment outlets. Their mindset has not caught up to reality.

Rob Gregory Browne said...

How many times do I have to tell you this, Barry? Stop making sense.

JA Konrath said...

Great post, Barry. It really shows the bias against Amazon by people entrenched in the publishing industry.

I'm inclined to have a bias toward Amazon, because they've helped me make so much money, but like you I criticize them when they do things I don't like (marginalizing erotica on their site, removing reviews, recent contracts). I also don't feel like I'm one of the entitled members of the "Amazon establishment". Because Amazon is no more an establishment than they are a monopoly.

Perhaps the shadow industry of self-publishing might function as a quasi-establishment, but as you explained, they're more like a bunch of outsiders. With no barrier to entry, there is no sense of entitlement that comes with exclusivity. Everyone can join. Everyone keeps their rights. Everyone can opt out whenever they'd like.

People tend to value rarity and exclusivity and clubs that don't allow everyone in. It makes them feel special.

Amazon is making something that was once an exclusive club into something that is no longer special. That's a beef the "Authors Guild" has but won't admit. It's a beef also held by the MWA, HWA, SFWA, and other writing organizations.

I can admit to feeling special and privileged when I signed my first legacy deal. I'd gotten the key to the executive washroom. I felt like I'd finally made it. And that feeling wasn't easy to shrug off.

I didn't feel special the first time I self-published, at least not in that way. Instead of feeling entitled, like I deserved success, years of legacy publisher abuse changed my mind about what was truly important in this business. Namely, control.

Control over my IP gave me a sense of empowerment that was greater than the sense of belonging I had with the legacy system.

So does this sense of empowerment make me defend my new self-pubbing business partners?

Actually, no. It makes me question everything, because I'm now the captain of my own ship.

I'm grateful to Amazon. I was grateful to my legacy publishers. But I don't feel beholden to Amazon as I was to Hyperion or Hachette. I've become anti-establishment, and no longer fully trust anyone other than myself.

On Shatzkin's blog, he's adopted an erroneous mindset where authors get an advance which isn't supposed to earn out, which shows publishers actually pay authors higher "royalties" than 25% of net. (He doesn't seem to understand the concept of an advance.) Then he says that Amazon is hurting authors by removing pre-order buttons. But how can they be hurting authors when authors aren't expected to earn any royalties above their advance?

Damned if you do, damned if you don't. It's illogical, but it's human nature. Not seeing the forest for the trees is something we all tend to do is we aren't taking special effort to be self-aware and deliberate.

JA Konrath said...

One more quick, related analogy.

How happy are we when, as children, our parents hang our school art on the refrigerator?

We're proud. We got approval. Recognition. A pat on the head. A gold star.

It's a powerful motivator, t have this honor bestowed upon us.

Now if, instead, we'd hung our art on the fridge ourselves, would it make us feel as special?

No. We wouldn't really feel anything.

That, right there, explains the difference. Some people spend their whole lives striving to get that validation, and it is tough to separate personal self-worth from what others say about us.

I'd argue that the healthier perspective is to hang your own art. But I'm an Amazon shill, so what do I know?

elias said...

The term I think you're looking for is confirmation bias. I remember at some point, probably a few years ago, there was some research that showed people tend to interpret news as more biased against their own views the stronger those views are, regardless of the nature of those views. So the same MSNBC article would seem to have a conservative slant to a liberal and a liberal slant to a conservative.

I couldn't find the original article with a quick search, but I did find this amusing one: Difficult-to-read font reduces political polarity, study finds. Maybe Amazon's email to Hachette authors should have been in a harder to read font?

Unknown said...

I admit that I am one of the people who called it a PR stunt in a comment on Passive Voice. I'm not pro-Hachette, pro-trad pub or even particularly pro-Amazon. I'm self published and basically happy with Amazon, but I keep my options open by not going exclusive with them. I say that to indicate that I'm, I think, middle of the road in my opinions.

I thought the 50/50 offer was completely reasonable and that Hachette was short-sighted to refuse it. However, having refused the 50/50 offer, it's hard to believe Amazon thought they would accept a 30/52.5 offer. Which is why I called PR stunt. When you know, pretty much beyond a shadow of a doubt, that the other side is going to refuse it, it's not truly an offer in good faith.

Perhaps PR stunt was the wrong term, but I thought Amazon was doing a pretty good job by staying silent and above the fray. I still think that would have been the better tactic. On the other hand, I think I should have kept my mouth shut on Passive Voice because I don't know what's going on, and it's easy to armchair quarterback from the sidelines.

So how about if I revise my opinion to "I'm not sure it was a productive offer, considering the refusal of the previous offer"?

And yes, Hachette should have called them on it. Actually, they should have accepted the 50/50 offer, which made sense for a myriad of reasons.

Anonymous said...

All the many reasons why Hachette was right to refuse Amazon's PR stunt have been covered in many other places; I won't bother arguing those points again here. I'll just sum my POV up as so: The contract negotiations between Hachette and Amazon in no way gave Amazon any right to punish the authors. Using the guise of "it's just a business tactic" is like saying it's okay for the mob to beat up local store owners if they won't pay protection money. Amazon chose to act like a thug against an innocent third party in the mix. Why should Hachette cave into that thuggish demand?

As a small press publisher and occasional self-pub author at KDP I do plenty of business with Amazon and appreciate the opportunities there. But I'm also a former Big House author and those times were very very good to me in many ways. I see both sides but, dealing with Amazon as one of their vendors, (but prevented from going into detail by their NDA, which I've heard they even make their imprint authors sign!) I assure you the tactics and pressure they exert on the big houses are also being used on the smaller ones, too. This is about scraping profits out of the vendor margins. It's been happening for awhile, and will only get worse if Amazon loses this battle with the Big 5. And then it will stretch into KDP land. There's a good reason why Mark Coker came out in support of Hachette. Authors' interests are better served by aligning with trad pubs and trad authors to keep control of prices *away* from Amazon. High, low or in between, you don't want Amazon to own that territory.

Barry Eisler said...

Thanks for all the great thoughts, everyone.

Bob, I know the feeling... I've wasted a lot of oxygen advising the legacy industry and brick-and-mortar stores, too. Well, you can lead a horse to water...

Joe, that comment is worthy of a post in its own right.

Elias, yes, exactly, and thanks for the confirmation bias link.

Julie, I don't think the second Amazon offer was worse than the first -- certainly from the standpoint of the goal of compensating Hachette authors, it was even better. But as you note, we don't really know the details of the first offer (50/50 up to what amount?), so it's hard to say. Also, kudos for modifying your original opinion in the face of new information. That's an incredibly rare and admirable thing to do.

Debb, I'm left feeling that you didn't read or understand my post, so I'm not sure how to respond. I guess I'll just say, how can you say Amazon is acting like a thug when you don't really know what the dispute is even about? From whence comes your certainty that Hachette isn't acting like a thug?

Also, "Authors' interests are better served by aligning with trad pubs and trad authors to keep control of prices *away* from Amazon. High, low or in between, you don't want Amazon to own that territory." It's hard to imagine how Amazon would ever own pricing for KDP. Regardless, I know from experience that I sell more books and make more money at a lower price point. I prefer to run my business such that its success is aligned with what my customers want, and tend not to support businesses that depend on denying their customers what they want. So I don't support Hachette's or any other publisher's attempt, through collusion or otherwise, to maintain higher prices, windowing, DRM, and other practices consumers don't want.

Unknown said...

Sorry, Barry, I should have been clearer. I don't believe for an instant that Hachette is concerned with their authors, so yes, the second offer might have been better for authors, but I don't think that's Hachette's first goal, how ever much they are using the media to suggest it is. I'm not that naive! :)

I'd have to run the actual numbers, which obviously I can't do since neither side will give them to me, so you're absolutely right. We don't know which offer would cost either side more. Since the percentages aren't percentages of the same thing, it's an apple to oranges comparison. Just goes to show what happens when you let emotion get in the way of logic. And I thought *I* was being dispassionate. Thank you for forcing me to reconsider.

Now back to writing my next book, a far more productive use of my time than watching this particular tennis match.

Claire Chilton said...

I like to think I'm unbiased. I don't have a grudge against the Big Five. I'm part of them now, and they've never done anything bad to me. They've given me an opportunity, and I took it.

I don't have a grudge against Amazon. I've been with them for four years on the indie/self-pub side, and they pay me money for my books. I like that.

I'm critical of both at different times for different things, but I still like both for what they offer me. The second they stop offering me things that I like, I'll stop doing business with them. I'm a simple creature like that.

I don't fear a monopoly because I sell my books on my own website right now. If the world ends tomorrow in some catastrophic publishing explosion, my website will remain standing for the survivors to buy books from. (No really, the server is housed in bunker that can withstand a nuclear attack.)

So, I've been watching the Amazon vs Hachette thing while biting my tongue. There have been some tall tales floating around, and none of them came from the indie side.

I've watched authors that I admired in the past become mindless pawns. That was disappointing.

Even when some guy I'd never heard of before (Colbert? I'd never heard of him in the UK until now) flipped off my book retailer, I didn't say anything. Although, he did make me want smack him with his own book.

But now, Amazon is offering authors money for no other reason than they're being nice. Sure, it might be a PR trick, but who cares if it puts money in an author's pocket?

And what are the authors doing? They're turning it down! Are they stupid?

The defense against taking the money is that they're 'protecting their helpless publisher'. What, the one that earns 10bn per year? Helping them do what, buy more Koolaid? That's all a few thousand would stretch to in such a massive corporation.

After reading about it, I have to ask myself a question about Hachette. So here's my question: Is Hachette a cult? Will they be chanting 'for the greater good' next?

Money in the hand is better than an IOU in a contract. Publishing is a choice for an author, but it's still business. What kind of business relies on hearsay to make a decision? Facts, look at the facts people. Who is 'showing you the money'?

When loyalty is paraded around in a discussion about business, it makes me wonder how blindly stupid that business is if it can't remain professional.

There is something very cult-like about the trad reactions that keep coming up in this whole debate, and it's disturbing that people are so brainwashed that they won't take a big wad of cash when they're handed it.

Maybe I'm just money orientated. If someone offered me a large wad of cash to publish my book with them, I would because I like large wads of cash. They pay for my rent and stuff like that.

Amazon aren't even asking for books from these authors. They're just giving them money for nothing, to make their lives a bit better during a negotiation.

It's for PR! So what? Take the money and live the happy life. Neither of the massive, multi-billion dollar companies need your help. They're both big enough to fight their own battles, in a boardroom where the whole argument belongs.

There are lots of arguments about this whole event. The monopoly one made me laugh as I sold my own books on my own website with no problems at all, but the latest one is just insane.

Anyway, thanks for a great article. You covered the subject with perfect clarity. Reason and logic are what appear to be missing from a lot of the reports on this subject. It's nice to see someone reporting on it by implementing both reason and logic into the argument.

William Ockham said...

I think we do know what the negotiations are about. At least we know that Arnaud Nourry (CEO of Hachette) said that it is about gaining control of the retail price of their ebook titles. And we know that Amazon says it is about ebook pricing. And the two companies have been prevented from negotiating over that very issue for the last two years by the Hachette's settlement of their price-fixing case which concerned, wait, can you guess? Yes, colluding with Apple and four other publishers to gain control of the retail price of ebooks in order to raise consumer prices.

And, if you look carefully at the pattern of anonymous Hachette leaks, that Amazon is proposing a return to wholesale pricing for ebooks. And, contra, all the wailing and gnashing of teeth from the Big 5 apologists, the evidence presented at the antitrust trial (not to mention common sense) showed that the Big 5 would make more money from ebooks under the wholesale model.

So, while it is technically true that we don't know what the negotiations are about, we can assess with a high degree of confidence that it is about no-discount agency pricing.

Anonymous said...

Honestly, I don't think either side really cares about authors--any time authors enter the conversation, it is a PR move that ultimately has no bearing on whatever the heck they're negotiating about. The share of money they are fighting over is THEIR split. Authors won't gain a penny.

If Hatchette (and by extension other Big Publishers) "loses" to Amazon, it will be losing what authors couldn't win from their own publishers---higher ebook revenue share. If Hatchette ends up giving up revenue from ebook sales to Amazon, it will likely be unable to cut author ebook royalties without revealing that they had no intention of sharing more of the pie with authors. So Hatchette will end up losing revenue that authors claimed should have been author revenue in the place.

If Amazon "wins" more revenue share--it actually will be a victory for authors because it will prove that the huge chunk of ebook revenues that publishers have been keeping can only be negotiated away to someone with clout, i.e., not the publisher's authors. And, btw, when I say "victory," I mean that as Pyrrhic in the most depressing sense.

Lyle Lachmuth said...

First.. a trivial question, how long did it take you to write this logical, very well reasoned post

WE as humans are wired by evolution or God or both to see enemies ... self preservation and all that.

THEY vs WE ... their people vs our people ... so WE see a Writer like Patterson say blah, blah, blah, blah ... and WE, if we are Pattersonites go like, Dude Amazon is evil, man.

Until, we leave the Church of Patterson and then we are like Dude, Hachette is an evil entity out for domination of the known universe.

Read Thomas Szaz on THE MYTH OF MENTAL ILLNESS ... Tom was a PSYCHIATRIST and he so pissed off his peers that he was branded as evil ... note that word ... in the medical community. Labels are great things to hang on people ... ask anyone who is BI -- BIpolar, BIsexual, AmBIdextrous.

I think someone said, maybe yourself it was, WHEN emotion enters an argument LOGIC goes out the window.

Jacklyn Cornwell said...

I've said this several times, but Preston need not have cried about the blood money if he had any common sense at all. If Amazon gives him full price for his ebooks, Preston could simply take his contractual share, pay his agent her share, and send the rest to Hachette. Since he has a book that has not earned out, that book's money would go directly to Hachette so he could be paid accordingly. I do not see the problem morally or ethically here. The only thing that would be changed is how the money gets to the people involved, through the author by accepting Amazon's offer instead of through the publisher had this situation not occurred. No harm, no foul.

Or am I being spectacularly obtuse here?

Robin Henry said...

Actually, if we are going for accuracy, according to Matthew 27:7, the chief priests decided it was NOT lawful to take the money. Judas had thrown it into the sanctuary and left. Because they could not keep it, since it was blood money, they decided to buy the potter's field.
If you are going to call foul on other people's co-opting of religious language/metaphors, you have to make sure your use of the same is accurate.

The Blogger said...

Most people think that Amazon's offer was insincere because Hachette couldn't legally alter all of its contracts with the authors en masse.

James N Cook said...

To say Hachette could not accept Amazon's offer because of existing contracts with their authors is a fallacy. Think about it: What is the purpose of a contract? Who enforces it?

First answer: To define rights, quantify the consideration provided, and settle lawsuits.

Second answer: The courts. But only if someone sues.

This begs another logical question: Are the authors going to sue Hachette for paying them above and beyond what their contract requires?

I think not.

As for Hachette's side, aren't they the ones who wrote the contracts in the first place? Who are they going to sue, themselves?

The Blogger said...

James, you speak as if Hachette's authors are united against Hachette. And if Hachette were to unilaterally breach the existing contracts, NOT A SINGLE one would object.

Whether they get paid more or not is immaterial. The contracts between Hachette and the authors would get breached and the authors would certainly have standing to sue, since they were parties to the contract in the first place.

As to who specifically would sue, I venture to guess the people on Preston's list are a logical first choice.

William Ockham said...

Actually, most people haven't even heard of this offer. I am no lawyer, but I am unclear on how this would have any impact on Hachette's contracts with authors, at least the vast majority of contracts which are based on net receipts. Under Amazon's terms, Hachette would net zero on every ebook sold and Amazon would effectively be donating the sales proceeds to the authors.

The Blogger said...

The experts (that is, lawyers and agents) seem to agree that Hachette would never able to legally accept Amazon's offer.

Steven Zacharius said...

From what I've heard from some big retailers, Hachette's sales are up 20% with why would Hachette want to give up 100% of the sales to the authors if book sales are actually occurring already? We don't know how many sales have been lost, nobody does other than Hachette although I guess we could look at Bookscan and compare numbers from one author's book to the prior title and come up with a reasonable idea of the impact.
I think both petitions are publicity stunts and none of them will have any impact at all. The indie letter has more signatures because you can post it on your sites and get signatures. I don't know where the Preston letter was posted. But the number of signatures of one versus the other doesn't show how the public perceives the negotiation.
Why would Hachette want to lower their ebook prices if they are able to get what they want? They make more and the author makes more. Consumers might not like it but shouldn't the publisher be able to determine their list price? With Agency lite, Amazon was able to discount the prices if they wanted....I have no problem with that model. I have a problem that they won't let all publishers be on agency lite. That's a much more important issue.
And as far as you being an Amazon fanboy.....I don't know if I'd call you that but you are certainly a major hawk of KDP...which is totally fine but not totally unbiased. But it's your blog and you can write what you want.

Steven Zacharius said...

What's the point of even suggesting what would have happened if Hachette would have suggested just spur hypothetical anger? They didn't, nor would they have. It's clearly a publicity stunt. They ought to keep the negotiations to themselves and out of the media.

William Ockham said...

@The Blogger - What lawyers were quoted in that Slate article? All I see are quotes from agents. And what the agents say is the authors can't accept the offer which is correct and totally irrelevant. Amazon made the offer to the party (Hachette) who could accept it. Amazon just asked a few agents and others what they thought about it (and yes, that was surely a ploy to get the offer leaked).

You might be correct, but that article has zero support for your assertion. Also, you might want to google "Slate pitch".

@Steven Zacharius
I don't think anyone thinks Hachette wants to agree to the Amazon deal. The point of the offer from Amazon's perspective was to demonstrate their willingness to help authors who may have suffered financial losses. I think it is in Amazon's interest to show that they are concerned about authors.

You asked if publishers should be able to determine their list price. The whole discussion of "agency pricing" gets confusing because the terminology was introduced in the context of the price-fixing conspiracy. The "Apple" model included agency (which for digital goods impacts mostly things like tax issues), "Most Favored Nation", which basically protects the retailer from the supplier offering the same goods to other retailers for less money, and retail price maintenance (RPM) which allows the supplier to dictate the minimum retail price for the goods sold. Technically, the Apple contracts didn't specify RPM. Instead they tied the maximum price of the ebook edition of a title to the list price of the print version. But it was RPM due to the MFN clause in the contract.

I really doubt you would want to pick up the burden of sending sales tax payments to thousands of different taxing jurisdictions that true agency would require. If you just want a shot at a 70/30 split, I think we both know that ain't happening for Kensington. I'm pretty sure it won't happen for Hachette either.

And, not to speak for Barry, but his "what if" about Hachette proposing the deal is to get people to think about their own biases. Can you imagine anything that Hachette could do that would make you think that they are in the wrong in this situation? What if they were breaking the law, just like they did in 2010?

The Blogger said...

@William - I don't think you read the article carefully enough. The offer was made to Hachette but for Hachette to accept the offer they would have to re-write the contracts with their authors.

Knowing the impossibility of such an effort, we can conclude that Amazon's offer is more of a whimsical than real nature.

Having said that, I'm firmly on Amazon's side and hope they hold out until Hachette folds.

William Ockham said...

@The Blogger

I think you need to read the article again. The author, who is no expert, attributes the claim to "agents" that contract re-negotiation would be required, bit none of the agents quoted actually say that. And, AFAICT, none of the agents who are quoted are lawyers.

This is a case where logic is our friend (certainly not always true wrt the law). Let's go Socratic.
Would you agree that Hachette can "sell" their ebooks for zero dollars under their current contract? If so, what does the author earn in royalties for each sale? Now, what happens if the "agency" sale of an ebook is 0%/100% (with the publisher getting zero percent)? If the authors contract is 25% of net, Hachette is liable for 25% of 0%, which is 0 dollars.

I am fairly confident that the answer to that first question is yes. Have you ever heard of a Big 5 contract that let the author control the retail price of their books? Have you ever heard of a Big 5 contract that let the author control the publisher/retail split?

I think it would be suicidal for Hachette to agree to the offer, but I see nothing that prevents them, save common sense.

Barry Eisler said...

William, no argument — your speculation about what the dispute is really about is the best informed and most thoughtful I’ve encountered anywhere. I think you’re probably right. Of course, none of that changes the fact that Preston himself claims he doesn’t know what the dispute is about — and yet he’s opining regardless.

Robin, granted I’m no expert on the story of Judas and Jesus. Wikipedia notes several versions. The one you favor is an interesting variation, but I don’t see how it would contravene my point.

The blogger and William — I read the Slate piece, and still don’t see any legal reason that would prevent Hachette from waiving its right to proceeds from Amazon digital sales (remember, the offer was to Hachette, not to authors). Regardless, note that Hachette didn’t cite any legal obstacles as a reason for its refusal. So even if those reasons might exist, they’re why Hachette refused.

Steven said, "From what I've heard from some big retailers, Hachette's sales are up 20% with why would Hachette want to give up 100% of the sales to the authors if book sales are actually occurring already?”

So Steven… the dispute is actually *benefitting* Hachette and its authors? Okay, then problem solved, no?

"The indie letter has more signatures because you can post it on your sites and get signatures.”

The fact that you’re certain this is the only possible explanation, apparently can’t even imagine any other, is an exceptionally clear example of the kind of bias I describe in my post.

"Why would Hachette want to lower their ebook prices if they are able to get what they want? They make more and the author makes more.”

Only if unlike just about everything else ever bought and sold, it’s impossible that higher book prices could lead to lower sales volume, and if it’s impossible lower prices could lead to higher volume.

"Consumers might not like it but shouldn't the publisher be able to determine their list price?”

Yes, if you want to build a business predicated on doing things consumers don’t like. “Should” doesn’t logically follow from “can.”

"And as far as you being an Amazon fanboy.....I don't know if I'd call you that but you are certainly a major hawk of KDP...which is totally fine but not totally unbiased.”

No one is without bias. What matters is whether an argument is logical, coherent, consistent, and supported by evidence.

"What's the point of even suggesting what would have happened if Hachette would have suggested just spur hypothetical anger? They didn't, nor would they have. It's clearly a publicity stunt. They ought to keep the negotiations to themselves and out of the media.”

All of this is addressed in my post itself.

Ah, William, I see you addressed a lot of my previous comments — thanks.

The blogger said, "The offer was made to Hachette but for Hachette to accept the offer they would have to re-write the contracts with their authors.”

This is incorrect. Hachette could waive its rights in a side letter. It would be easy — if they wanted to do it.

jens said...


I find it difficult to reconcile your support for Greenwald et al (which I share) with your support for Amazon (which I do not).

Bruce Schneier, who has access to the Snowden docs, says that every technology company in America must be considered commandeered (his word, not mine) until proven otherwise.

Now. Suppose you're a fascist oligarchy, and your secret police exist for the sole reason of suppressing dissent.

You have the power to order Amazon to change its algorithms, promote some authors, demote authors, falsify payments, hide payments, etc. And to imprison Amazon executives who fail to cooperate. And to do all this in secret.

As long as it's plausibly deniable, why would you not do this?

As an indie author myself, I am the first to criticize the New York publishing model. But it is a great deal more difficult to hack and "disappear" a warehouse full of paperbacks than it is to sabotage and suppress electronic dissent.


Unknown said...

Great article. I very much enjoy reading your stuff.

It's hovering very dangerously close to something I swore off years ago but the clear headed thinking and ability to see both sides of the argument - and note them both - before presenting your position is something badly lacking in general discourse everywhere. I've marveled at people's inability to do this in politics - and I've seen more than one or two parallels in this whole Amazon/Hachette debate.

Anyway, I'll keep reading and please keep it up.

For me I'm off to buy a copy of London Twist.

William Ockham said...


You would not make a very good fascist oligarch. If you had that kind of power, that isn't how you would use it. Instead you would let Amazon do their thing and use the resulting data to track the undesirables. You don't want to suppress the leftie views in Eisler's books; you want to find out who likes them. Fascists need enemies even if they have to invent them.

The last thing you would want to do is mess with Amazon's algorithms. The key distinguishing feature of tyranny is that the tyrant knows everything about the thoughts and deeds of citizens and the citizens know nothing of the deeds of the tyrant. To supress dissent you have to know where it comes from. Amazon is better as an information source than a propaganda source.

The real threat to fascism is decentralization. On that scale, Amazon and legacy publishing are roughly the same, highly cemtralized.

NWA said...

There's a bigger piece to the Amazon v.s. Hachette fight that we're missing: the rest of the Big 5.

The Big 5 operate as a cabal. Whatever deal Hachette finally makes with Amazon, the other Big 4 will demand eerily similar terms once it's time to renegotiate.

So, Hachette flops around like a soccer player with a skinned knee and pressure mounts for Amazon to cut a sweetheart deal.

It's collusion all over again. You'd think the DOJ ruling would have knocked some sens into them.

Hachette has the weaker hand here. They need Amazon to survive, Amazon doesn't need all. If Hachette is cut off from Amazon, all those Hachette authors will peel off for greener pastures. Wait and see how loyal a hungry dog really is. [I don't think Hachette authors are dogs, I just love the analogy. And because Joker.]

A.G. Claymore said...

Hachette can't accept the royalty offer because it would start the clock for them. They'll keep obfuscating and foot dragging until they're no longer the only publishers 'negotiating' with Amazon. They want agency back and they're too small to get it alone.