Amazon/ Hachette war wages on, dragging authors in the middle

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For some time there has been a dispute between the online retailer and sometimes publisher Amazon and the publishing house, Hachette. Amazon wants more flexibility to sell books at lower prices, while Hachette stands by its right to maintain higher prices for its goods.

This week Amazon attempted to reach out to Hachette’s authors in a letter and put forth an idea:

“Dear XX,

I wanted to ask your opinion about an idea we’ve had that would take authors out of the middle of the Hachette-Amazon dispute (actually it would be a big windfall for authors) and would motivate both Hachette and Amazon to work faster to resolve the situation.

Our first choice would be to resolve a dispute like this through discussion only. We tried that already. We reached out to Hachette for the first time to discuss terms at the beginning of January for our contract which terminated in March. We heard nothing from them for three full months. We extended the contract into April under existing terms. Still nothing. In fact we got no conversation at all from Hachette until we started reducing our on-hand print inventory and reducing the discounts we offer customers off their list prices. Even since then, weeks have gone by while we waited for them to get back to us. After our last proposal to them on June 5th, they waited a week to respond at all, promising a counteroffer the following week. We are still waiting a month later.

We agree that authors are caught in the middle while these negotiations drag on, and we’re particularly sensitive to the effect on debut and midlist authors. But Hachette’s unresponsiveness and unwillingness to talk until we took action put us in this position, and unless Hachette dramatically changes their negotiating tempo, this is going to take a really long time.

Here’s what we’re thinking of proposing to them:

• If Hachette agrees, for as long as this dispute lasts, Hachette authors would get 100% of the sales price of every Hachette e-book we sell. Both Amazon and Hachette would forego all revenue and profit from the sale of every e-book until an agreement is reached.

• Amazon would also return to normal levels of on-hand print inventory, return to normal pricing in all formats, and for books that haven’t gone on sale yet, reinstate pre-orders.

Here’s an example: if we sell a book at $9.99, the author would get the full $9.99, many multiples of what they would normally get. We can begin implementing this arrangement in 72 hours if Hachette agrees.

We haven’t sent this offer to Hachette yet — we’re sending this to a few authors and agents to get feedback first.

What do you think?  Would this be helpful, especially for midlist and debut authors?

Can we talk on the phone later today or tomorrow once you’ve had a chance to digest?

Thanks and look forward to talking.”

To get an idea of how this was received, WWAC reached out to Brian McClellan, author of the Powder Mage Trilogy from Orbit (an imprint of Hachette). Brian has also self published several novellas attached to the series.

WWAC: How do you feel about the offer Amazon has extended to you?

BM: The whole thing puts Hachette authors into a lose-lose situation. If Hachette caves to Amazon, Hachette loses ebook profits and that causes authors to lose out on royalties. If they continue to fight, this could drag on for who knows how long and sales will continue to suffer.

 

WWAC: What do you think Amazon and Hachette are looking for in this struggle?

BM: I think it’s true that both companies are, in the end, looking out for their bottom line. Of course they are. That’s how capitalism works. But Amazon is forcing a race to the bottom that is going to hurt midlist authors most. They’re creating an environment where readers expect cheap ebooks, quality be damned.

 

WWAC: What is your overall view of how this whole thing is going down?

BM: I see a lot of misguided love for Amazon as some champion for authors and I don’t think that’s true. Amazon, in most cases, is not a publisher. They are a sales platform just like Kobo, Nook, iBooks, or any of the others. As a hybrid author that uses these sales channels I think Amazon can be great and I’m glad for the extra money they put in my pocket. But I don’t kid myself that they’re anything more than a sales channel. Some day their terms will change and I’ll lose part or all of that income stream. They already did it on ACX and they’ll do it again.

Thank you Brian!

Are you affected by the offer? How do you feel about it? For self-published writers, how do you feel about Amazon extending such a generous offer to Hachette’s writers?

Let us know in the comments!

 

 

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About Author

Staff Writer Lela Gwenn is the girl next door in a very bad neighborhood. She eats vegtables, reads comics, writes all the things and tweets like it's her job. Owner of two dogs and one resting bitch face. Is probably not planning to kill you.

2 Comments

  1. I feel that Hachette (and pubs like them) need to change the royalty terms to reflect the changing landscape of distribution and sales; and Amazon needs to alter their terms and conditions to better benefit readers buying their eBooks–and if they’re unwilling to do that, then they need to purchase titles outright from publisher, in order to benefit from ‘renting’ digital literature to their customers at a price that makes them happy.

    When eBooks became all the rage, there was a definite trend by established publishers to price eBooks as if they were high-end paperbacks. The hardcover market is for those that want to collect books—whilst the paperback market is for those that want to ‘consume’ books; there’s a difference between the two—and publishers know this because when they arrange royalty terms, each is reflected in what’s presented to author at signing. Something’s got to give in terms of scheduled percentages as they relate to profitable formats.

    Eventually one publisher will have to stand up and say ‘our new mass market is going to be digital’ (this likely won’t happen until Boomers and Gen-X’rs are no longer the largest chunk of the mass market)—that being said, waiting until this happens to alter terms that better reflect growing digital sales and still pay the same terms for paperback sales, isn’t working with the mediums largest distributor, Amazon.

    Amazon wants lower pricing because that’s what their customers want–but the truth is, Amazon isn’t technically ‘selling’ eBooks; they’re ‘renting’ them.

    So when Hachette is asking me to lease an eBook for 9$ or more, that’s 9$ I lose should Amazon decide to one day brick my reader because of some real or imagined rule that I, as a consumer, have broken. This is real problem here–and neither side wants to admit it their place in it.

    Case in point: customers complain to Amazon that eBooks over 9$ are bad (they even give them bad reviews because they think eBooks cost nothing to make–which is bullshit), in turn Amazon pressures big-pubs to lower the price–something pubs won’t do because they’ve signed an author to unrealistic digital percentages–and there’s design overhead that needs to be met with each eBook they release.

    Amazon’s crime here is that they’re willfully ignoring the fact that don’t sell Kindle books–they rent them; and it’s easier for a consumer to buy a book for 5$ or less when you know the library you’re building might go away should Amazon sever your account relationship.

    Both parties need to change. Pubs need to seriously assess which format sells more (paperback or digital) and adjust royalties to the author accordingly in order to recoup the price of investment for the digital edition. Amazon needs to alter their terms and conditions, to instill confidence in the consumer that what they’re buying is theirs (which I doubt they ever will) and if not, renegotiate terms with the publisher to buy a title outright at a wholesale price, so that Amazon can continue to ‘rent’ said titles to their consumers–at whatever price they want.