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Monday, August 11, 2014

HACHETTE VS. AMAZON: @TWLuedke's letter to Hachette (syndicated post)



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The following was written by Travis Luedke and was originally posted on his blog HERE. He has given me permission to syndicate it. Be sure to check out his books, such as the following...

Cover links to Amazon.com
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I got a letter in my email today from Amazon, and I just had to respond. This is the email I wrote to Hachette CEO, Michael Pietsch, Michael.Pietsch@hbgusa.com.

Dear Hachette:

Amazon wrote me a fascinating letter today, which prompted me to weigh in with my opinion on this funky contract dispute happening in a very public format.

Here is a copy of the letter Amazon sent me: http://www.readersunited.com/

Before I tell you what I think, here's a little about me:

I am a bibliophile and an author and an Indie publisher. In July, I became a NYT and USA Today bestseller.  I have never once written a query letter to an agent or submitted a manuscript to a megacorp publisher.

My eight books are available on AmazonB & NiTunesKobo, and Smashwords. In addition, I participate in five blogs and contribute to four Emagazines in various genres that are uploaded in various websites that distribute them freely.

I have a new book planned for preorder in October, The Nightlife Moscow. I am collaborating on Passionate Bites, a vampire romance box set with 9 authors also going preorder in October, and I am partnered with another author, Kayla Stonor, to manage her new edition releases and social media marketing.

I have never cared who publishes a book. Publisher brands are irrelevant to me.

I have over 1900 books on my Kindle, which I read on my PC, phone, and tablets. I get new books every day.

I rarely read a paperback these days. When I do, its from authors I have been a fan of for many many years, like Dean Koontz and Laurell K. Hamilton.  When I buy paperbacks, its because I caught a deal at the Dollar Tree, or a used copy off Amazon for $4-$5, or I found them in a used paperback store.

I used to read three+ books a week, now I'm too busy writing and publishing, so, its more like one book a week -- apart from editing and critique work I do for several author friends.

Moving on, here's what I think about the debate of Amazon vs. Hachette, and its harm to authors:

Amazon, a retailer, knows exactly how their business works best for them and their consumer.  Their interests are not necessarily the best interests of megacorp publishers, regardless of the fact that these megacorps are making shittons of money off of Amazon's phenomenal book discovery engine -- the best system of its kind.

Side note: did you see the new thingy on Amazon, below each book, "Frequently Bought Together" which miraculously directs the buyer to get even more books in one purchase?  Isn't that awesome?

Back to my point: Megacorp publishing contracts typically pay authors a pretty crappy royalty on ebooks, which is quickly decreasing their overall royalty payouts as ebook sales overtake paperback, and yet still publisher revenues are increasing with the continued growth of the ebook market...

How is this?  

Because ebook sales booms often happen at lower price ranges (which is what Amazon is all about).  Sadly, at those prices, the author's royalty is also lower, and often, megacorp publishing contracts cut the royalty percentage lower for special sales discounts.

What's funky, ebooks have zero cost, and zero distribution issues, and yet, megacorp published authors still make less money on them? Ebooks should be the highest profit/royalty item for an author, because no one has to print, warehouse, or ship them, no infrastructure necessary to the supply. There is no overhead to ebook sales and distribution.

Ebooks are the fastest growing sector of publishing sales, accounting for huge gains in profit margins of megacorp publishers last year and this year thus far, yet authors are making less royalty because of funky publishing contracts?

Who is supposedly harming authors? Amazon?

My message is this: I have loads of sympathy for authors of Hachette who are being victimized by their megacorp publisher

Hachette gets no sympathy from me. The company is whining in its beer -- very publicly about how Amazon is hurting the authors, about how authors are losing sales (read $$), but, its the contracts that Hachette uses and the royalty percentages that Hachette pays its authors and the asinine insistence on price-fixing (to the detriment of sales volumes) that is the true source of harm to authors. 

Lets not forget the monster antitrust lawsuit against Hachette and other publishers for price-fixing. Hachette is now attempting the same kind of tactic with Amazon.

Today's world of book retail is focused on highly competitive price structure, where discounting digital products is expected by consumers. Yet Hachette is fighting tooth and nail to retain the right to price-fix their ebooks, and block Amazon from discounting.

How does price fixing and blocking a retailer's ability to offer discounts help authors?  

It isn't helping the megacorp authors whose books cannot compete with lower priced offerings. It isn't helping consumers who statistically buy more volume of books when offered at lower prices.  It isn't helping the propagation of quality literature.  

Price-fixing is an attempt to preserve paperback sales, against the natural flow of the market as it adapts to and falls in love with ebooks and other digital entertainment and information products.

So, all this screaming and crying and arguing and other BS is for what? 

So that Hachette can try to preserve its paperback sales by having ebooks priced the same as paperbacks?

How the hell does this have anything to do with the concept of protecting authors and quality literature?  

Sounds like Hachette has engaged its book publishing PR organization to spin propaganda and fling it across the media worldwide to put pressure on Amazon in their negotiations.  

Since when has Hachette ever publicly stated they are the self-appointed protectors of authors and literature? From their demands on Amazon, it would seem they are a megacorp who wants to protect a certain business model, and that business model is proven harmful to authors.

My bullshit detector is screaming like a firetruck.

From where I stand, Amazon isn't the one in this negotiation that is responsible for hurting Hachette's authors.

Hachette needs no help at all to hurt its authors, its been doing a fine job of that all on its own.

My advice to Hachette:

Hachette, instead of inciting authors across the world into frenzied arguments over half-truths and BS propaganda, why don't you take your dispute and go to court, quietly. I'm sure the DOJ would love to preside over this dispute in court, and I imagine they are watching these proceedings very closely.

Hachette, leave the authors and your monster PR campaign department out of your contract negotiations. This is a polarizing issue, causing nothing but strife between authors at a time when we need to be united and working together to face a rapidly evolving industry. Many authors are so confused about the future of publishing, that some will choose not to publish, simply because of this ugly mess of propaganda you have dragged out into the media.

My advice to authors:

Want to learn  the down and dirty, nitty gritty about this heated debate?  
Check out JA Konrath's blog: http://jakonrath.blogspot.com/

:)

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