Sunday, June 15, 2014

Amazon, Hachette, Michael Corleone and Me

@jamesscottbell

Unless you've been on the surface of Saturn for the last couple of months, you have no doubt read at least something about the clash between Godzilla and Mothra.

By which I mean, of course, the strained negotiations
between Amazon and Hachette. There is a whole lot out there on the internet about this. Just tickle Google and you'll find hours of reading pleasure.

On the macro level, this is about nothing less than the future of publishing. If Hachette "wins," things will look brighter for the entire traditional publishing industry. If Amazon "wins," traditional publishing will face ever-increasing challenges to its relevance and perhaps even its survival.

So this is a very big deal indeed, which is why both sides are entrenched and why so much acid is being hurled from advocates of either side. For a bit of this, consider James Patterson (Hachette advocate) versus Joe Konrath (Amazon advocate).

Which brings me to  Michael Corleone.

You'll recall that Michael is the good son, the Army vet who comes back from the war determined not to get involved with his family's enterprises.

That all changes when his father, Don Vito Corleone, is nearly assassinated. Michael comes to the hospital one night and foils another attempt on his father's life. Outside the hospital he confronts the dirty police captain, McCluskey, who proceeds to break Michael's face.

At a meeting of the Don's inner circle, Sonny Corleone rants and raves. Michael then quietly suggests a plan to take out the traitor, Sollozzo, and the dirty cop. He, Michael, will be the shooter. (This, by the way, is the "mirror moment" for Michael).

Sonny rejects Michael's suggestion. After all, Michael is just a "nice college boy." What does he know about such things? He's mad just because a cop slapped him around? "You're taking this very personal," Sonny jokes.

But Michael lays it all out in further detail, convincing everyone to go along with it. Then he looks at his brother and says, "It's not personal, Sonny. It's just business."

And that's what's going on with Amazon and Hachette. It's business. Big business. Really, really big business.

But it's not personal. This is what businesses do: jockey for the best position in a competitive marketplace. (Of course, if a business runs afoul of anti-trust law in this competition, the Department of Justice is liable to step in).

This time, we assume everyone's playing by the rules. How does the game look?

Amazon does not owe Hachette a profit and Hachette does not have to do business with Amazon.

If Amazon loses Hachette's business, it will not have a huge affect on Amazon's bottom line (one that is fed by other items than books). If Hachette walks away from the world's biggest book seller, Hachette will suffer a major hit.

On the other hand, Hachette believes that if it accedes to the current offer by Amazon it is accepting a long, downward trendline.

But it's not personal. Except for authors. Because right now Hachette authors are being squeezed out of the Amazon store, and that means real harm to actual careers. This week Hachette revealed just how much they are being impacted in the Amazon dispute. And several Hachette authors have gone public on said harm, often making Amazon the villain in very Godfather-like terms ("Amazon stabbed me in the back!").

So when I see frothing and vitriol from authors over this fight, I am not surprised. I'm even sympathetic. Yet I remind myself that such fights are just business as usual, and fuming does not put steak on the table.

I am a Hachette author and I am an indie author.

But I am also a cork riding on top of the roiling sea. No matter what happens around me (most of it out of my control), my job is to keep writing and then find the best place for what I write.

Which is why, as Godzilla and Mothra decimate Tokyo, I sip coffee in Los Angeles writing my next novel.


So how do you view the Amazon/Hachette kerfuffle? Do you see villainy here or simply the free market at work?  

30 comments:

  1. I am not aware of the kerfuffle in question, other than the fact that I did see a vehement (but unexplained) repudiation of Amazon by an author citing something to do with Hachette.

    All I know is it would cause me harm if I can't be a customer of Amazon (or in the future, a bookseller at Amazon). I would not suffer any consequences without Hachette.

    I understand everybody wants to survive, but it's Amazon that makes books affordable for me to purchase. That's the bottom line.

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  2. As writers and readers, we tend to think of Amazon as being all about books. A recent article in Forbes revealed the numbers involved. Their annual revenue is $75B. 7% of that ($5.25B) is generated from the sale of books. Amazon could shut down their book sales biz tomorrow and still be a global giant. That's because you can buy virtually anything from them. The Big 5 have to sell books to survive. I don't know how this current dispute can be resolved, but some new, aggressive business plans need to be developed on the part of the legacy pubs.

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  3. As someone who has spent the last couple months on the surface of Saturn, I've spent the last hour catching up on the controversy.

    I understand the battle between traditional publishers and Amazon, and the consequences. But how will all this affect indie publishers or small POD publishing houses? Do they stand to gain or lose, depending on who wins the battle of the giants?

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    1. No effect on indies and small pubs, Steve. Amazon continues to distribute their books. As I said, the only writers affected are those with Hachette.

      The one scenario floated by some is that if Amazon wins, and if traditional publishing vanishes, Amazon's dominance might mean that they change their current terms with indie writers to something less favorable than it is now.

      Hugh Howey contends, however, that even if that were to happen, those terms would still be better than what traditional publishers are offering authors today.

      So any change vis-a-vis indies is speculative and way up there in the future. For us today, that means be a cork, keep writing, and make sure you understand publishing contracts fully if you desire to float into the Forbidden City.

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  4. I'm with you on this, and it's good to see more even-handed opinions starting to come out. You deserve special credit for maintaining your equanimity while being personally affected.

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  5. I hope the best for all of us who want to get our books out to readers. I can't allow myself to get too caught up in the chaos but I do my best to know what is happening in the publishing world.

    As you said, Jim:
    "But I am also a cork riding on top of the roiling sea. No matter what happens around me (most of it out of my control), my job is to keep writing and then find the best place for what I write."

    I'm focusing on the writing too since this is out of my control. The publishing world is going to be a rollercoaster ride for a long time. My job is to keep on writing and not get overwhelmed.

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  6. You're absolutely right. It's just business. (Although later doesn't Michael say something like, "All business is personal?" Don't remember, might be time to reread "The Godfather.") Both sides are giant corporations trying to do what corporations do – maximize profits. But there are plenty of other online purveyors of books and perhaps Hachette needs to start pushing readers towards Powells or another outlet. Authors can do the same. It's hard to pick a favorite in the battle of behemoths. But remember that while it was fun watching Godzilla and Mothra, in the movie a lot of real people were getting hurt underneath them.

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    1. "Perhaps Hachette needs to start pushing readers towards Powells or another outlet."

      John: This is already happening. There is a full page ad in today's NYT book section for Michael Koryta's new book (Hachette published) which says prominently: "Now available at Barnes & Noble and all independent bookstores." (words to that effect).

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    2. John-- When you've been forced to deal for almost three decades with the agency/legacy publishing machine, it's remarkably easy to choose sides in this dustup.

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  7. Thank you for the great advice: keep writing. I'm still trying to get out of the cork dispenser so I can float on that roiling sea. And I can't do that worrying about corporate battles.

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  8. Publishers have been ruthless about pruning midlist authors, saying "it's not personal; it's just business." Yet authors are attacked for then publishing their out of print backlists on Amazon or negotiating new contracts with Thomas and Mercer. To which I can only say, "it's not personal; it's just business." The old model is dying. What we are hearing now is just the death rattle. I don't want to see publishers and bookstores to go under but I see little evidence that anyone is doing anything to change. And a lot of good people, authors, editors and artists included, are going to get hurt because of the stubborn desperate need to cling to the past.

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    1. Indeed, Kris, today it was revealed that the 3% staff cut at Hachette included two longtime and respected editors of "literary fiction." Which means the publisher is coalescing around A list commercial authors. That leaves no room for midlist or literary authors. How long an A list-only model can sustain the ship remains an open question.

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  9. I suggest that the disputants take a meeting over in New Jersey at Satriale's. Personally, I love Amazon and have been a happy customer for a long time. And I love my Kindle, too. I hope to become a happy author of Kindle books in the coming weeks. Amazon is a wonderful opportunity for writers. Quite obviously, there are tons of readers out there who are huge fans of eBooks and Amazon Kindle. Happy, satisfied customers.

    Whaddayagonnado?

    Oh, and thanks for not putting "spoiler alerts" on your post, Doc. Now everyone knows what happens in The Godfather--including the big "face in the mirror" moment.

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  10. This is the first step in changing the percentages Amazon pays. First they will change terms on their biggest book vendors (the big 5), and then one day they will stop paying 70% on KDP and change terms to 50% or 30% and there will be no one with enough clout to stand up for all the indie authors.

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  11. Thanks for the good post, Jim.

    I've recently been trying to catch up on the World Cup of Publishing. I appreciate the Cliff's Notes! (And I love how you discreetly pointed out the mirror moment. Well done.)

    One has to wonder if we'll all live long enough to see another player emerge that will give Amazon a literal run for its money.

    I too love Amazon and use it all the time. But for any entity (emphasis on "any entity") to have that much power should make us all a bit uncomfortable, shouldn't it?

    I also love the institution of traditional publishing and what it represents. I also hope we all live to see the day traditional publishing makes the changes needed to better serve its authors (and readers).

    Plenty to think about for sure.

    Oh, and Happy Father's Day, Jim!

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    1. Just remember, Diane, no one thought IBM would ever be challenged in the PC market. Things change. But Amazon is staying ahead of the curve with innovation and customer service.

      IOW, they have a big lead in the race for customer loyalty.

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  12. I guess I am confused. I am an author whose publisher (Chronicle Books) is distributed by Hachette. So, this fight is a little closer to home for me than I'd like. Up until now, I have been a supporter for Amazon. My take has always been: change or die. But, Amazon is now starting to stretch it's monopolist muscle in a way that doesn't feel right to me. It feels a lot like WalMart--which maybe it's been all along and I just didn't see it. And I have a point of (personal) honor, which is that I have never stepped a foot into WalMart and hope never to have to do so. So, now that Amazon is acting like WalMart, I'm not clear for myself on how to go forward from this point.

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  13. Hatchette, an arm of a multi-national corporation telling me they are trying to save me from Amazon and books I can afford reminds me of my congresswoman telling me she was going to save me from the Affordable Care Act and insurance I can afford.

    My sympathy for Hatchette is somewhere in Eric Cantor territory. If a supplier goes to far, a retailer can remove that supplier's product from the shelves. Furthermore, they can direct customers to other similar products.

    When I see a big name trad pub author saying, "I hope the Big 5 keeps up the fight against Amazon . . . "

    Yes, please Hatchette! Save me from books I can afford! Please Hatchette, ensure the existence of the $13.99 ebook for all the generations!

    At no time has Hatchette said that if allowed to keep ebook prices at high levels that it will share this bounty in terms of higher royalties and advances. Those profits are funneled to the international mother-ship.

    I was talking to the owner of a new small pub last week. Their first push is bringing back backlists in print and ebook with updated covers. Their books are gorgeous.

    They reached out to some writers who have been out of print for 20+ years. Yet, when they contacted the publishers about reversion on some titles, suddenly the publisher threw up a poorly formatted ebook with an 8% royalty and claimed the book wasn't OOP and subject to reversion.

    So, my sympathy for the Big 5 = Zero

    It doesn't mean I am a slavish Amazon groupie. I've worked with them as a vendor and it isn't all that much fun. But you do get service and you do get exposure. My dealings with Createspace on a niche project was superb. The only problems I had were when I ignored their advice.

    Funny when Barnes & Noble did this same thing to Simon & Schuster, no one screamed. When I pinned someone down on that, they said, "Well, B&N is irrelevant, Amazon isn't." Okay . . .

    I love the pic because I have been using the same simile for the last month. This isn't David and Goliath. Hatchette isn't the plucky underdog. This is Godzilla and Mothra. Unfortunately, the authors under contract (because we readers can get it elsewhere if we choose) are Tokyo.

    The question is, how far is Hatchette willing to burn down their writers, depending on them to fight the PR war, before a compromise is reached?

    And if Amazon goes too far, something will rise up to take its place. The public isn't going to do without books, CDs, banana slicers, and 3-wolf t-shirts. eBay got too big for its corporate britches and took a hit. It also spawned Etsy. When Netflix went too far, it lost $100/share of value and was forced to scuttle plans to spin off the DVD division.

    Amazon has the same power as any company to choose the suppliers it puts on its shelves. Instead of moaning and wringing their hands and merging with each other, maybe the Big 7, oops Big 6, wait, the Big 5 need to rethink their own business models in the new virtual world.

    Terri

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  14. I'm sort of torn with this whole business. On one hand, the Big 5 Publishers are operating on an outdated business model, and instead of changing them to match Amazon's progressive (at the moment) stance, they're just clinging to the old ways.

    On the other hand, Amazon is not our BFF like some people believe. They're innovative and running a sound business model, not out of the kindness of their heart, but because of their bottom line.

    Competition is good, and I worry once Amazon clears away the dust of legacy publishing, they will turn around and change their terms to be more predatory of authors once the corporate lawyers are gone.

    But, as you stated in response to another comment Jim, it's possible that before that happens, there will be something new and innovative, and at the very least, Amazon is hardly the only self publishing revenue out there.

    So yeah....I shall be a cork riding atop the roiling sea. I shall be a leaf on the wind...watch me fly...

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    1. I am going to channel Hugh Howey here about worrying about things that might happen, that could happen even when they make peace with Hatchette, and even if it did happen, Amazon could cut its deals in half and still be better than trad pub. There are plenty of writers to go around, there is no competition for writers, only shelf space. And if Amazon goes too far, it's version of Etsy is waiting in the wings.

      No one has offered any rationale that Amazon offers good terms with authors because of Big 5 practices.

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  15. That's right. Take it to the mattresses.

    I agree with you, Jim. We can do nothing to control this issue. All we can do is make our own smart war, I mean business, strategies.

    My strategies are to write more books. Continue to build my audience and my own email list from my own website. And make sure my books and merchandise are available across multiple bookstores/platforms and even from my own website.

    The one thing that has amazed me by many commenters of other articles has been the number of authors who have refused to learn what this developing story really means. These negotiations will have a huge impact on the future of publishing, and though we have no control over it, we should at least understand what it will mean to our own personal business.

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  16. This has been fascinating to watch. I agree--it's just business. I'll be watching closely though, while also plugging away on the next book. Writers write, but we're also running small businesses.

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  17. Having been on Saturn recently (busy with editing deadlines and trying to write, too), I really appreciate your breakdown of the issues, Jim, and I love the way you include links for those who want more info from both sides of the issue. Kudos to you!

    And the comments from TKZ's astute, savvy readers add layers of valuable info and even some good strategies, like the advice of Heather Sunseri in her second paragraph just above. Thanks for adding to the discussion, Heather, Terri, and the rest of you!

    Whenever I read James Scott Bell's posts on Sundays, then the insightful comments below it, I come out more informed than I was before I clicked on The Kill Zone. Thanks, Jim and all the rest of you!

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  18. P.S. I don't like the idea of anyone having a monopoly, but if it weren't for Amazon, I wouldn't be a published author right now -- and I'm sure enjoying the 70% royalties I get from the sales of my e-books! Not to mention CreateSpace has been great, too. I've made several changes to my books there, and it hasn't cost me a cent - unlike Ingram Spark / Lightning Source, where I have to pay $25 for every change, no matter how small.

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  19. The Big 5 could have done a lot of things. For example, they could have come together behind the B&N Nook, subsidized the price of the device to undercut Kindle, made works from their blockbuster authors exclusive to that device ("Your new device comes pre-loaded with exclusive works from Stephen King and Veronica Roth!) and sold ebooks straight to the consumers via the publishers' websites at a price even Amazon couldn't beat. That way, they would have saved their main physical distributor and leveled the field on e-readers.

    Or, they could dig in their feet, and like Hatchette said at their shareholder meeting "We must control the price of ebooks." and scream that Amazon is a monopoly! OMG A MONOPOLY!

    I read the article "Amazon stabbed me in the back." In my opinion, her pain is coming from the Hatchette in her back.

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    1. You crack me up, Terri....and with insight.

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  20. Improvise, Adapt, and Overcome....or die

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    1. I hear the latest trend in evolution is to take on the traits of a cork. Something about rising, roiling seas.

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  21. Authors who complain that Amazon stabbed them in the back are showing their ignorance. Amazon never cared for them, nor does Amazon care about books. As far as Amazon is concerned, a book is no different from a toaster or a fingernail clipper or a box of condoms. They are all just widgets to be sold. It's part of being the "Everything Store".

    Personally, I do not buy from Amazon and I haven't for years. I don't find their prices to be much lower than what I can get using my own two feet and a little bit of savvy, and I detest their human rights record. Anyone who treats their employees with that much contempt and cruelty doesn't deserve a cent of my money. Period.

    It does astonish me, though, that a company that has NEVER POSTED A PROFIT could have that much clout. My question is why were publishers so slavishly acquiescent to Amazon's demands in the early days? Why did they agree to such lousy deals - stacking the decks in favor of an entity that had zero regard for art, truth or literary value?

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  22. A bit late to the party. (Been away!)

    I see this as free market at work James. What I (initially) found surprising was that this made it beyond the boardroom, where it rightly belonged. From what I understood since I started following this story, this kind of negotiation happens every single day in the business world. So why did this particular one make the headlines?

    I believe the outcome of this battle will be significant for all parties concerned, especially authors. And yes, I do share the Hachette authors' pain. Nobody wants to be in their shoes and it must be frustrating to not be able to have a direct say in this discussion, although many Hachette authors have been voicing their dissatisfaction loudly.

    I hope that as a group of writers, be it trad or self-published, the vast majority of us will continue to support and inform each other. Sharing our experiences as objectively and as intelligently as we can, be they positive or negative, will be beneficial to everyone in the long term. It makes me sad when I see the obvious "it's us versus them" slant to any debate involving trad publishing and self/indie publishing. Step back and look at the bigger picture. Together, we are in a stronger position to negotiate better contracts, deals, royalty rates, and fairer treatment for ALL authors.

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