Thursday, July 31, 2014

Fisking Shatzkin's and Cader's Fisks of Amazon

Two days ago, Amazon released a statement explaining their position in the negotiation difficulties with Hachette. As many of us had guessed, it's all about ebook pricing.

Barry Eisler did a post about the statement, and I fisked Douglas Preston, history's worst poster child for publishing, because he continues to beat a drum that only 1% of authors can hear.

The fact that Preston acknowledges that many disagree with his position, but never responds to or addresses criticism, is equivalent to stuffing his face from a big bowl of fail with a spoon in each hand.

But elsewhere on the Internets, there are those who remain on Hachette's side and are vocal in their concerns about the Amazon statement. Among them, John Scalzi, Mike Shatzkin, and Michael Cader of Publishers Lunch.

Scalzi's take was skewered on the Passive Voice, with 178 comments so far, the majority of them critical of his POV.

I decided to address some of Shatzkin's and Caders comments, and Barry Eisler also weighed in on Cader on his own blog.

I'll start with Mike Shatzkin.

Mike: “Unjustifiably high” is an opinion, not a fact.
Joe: Mike, when Amazon has the data on what pricing structure is the most lucrative, that's not opinion. It’s math.
Mike: Publishers pay money for the right to exploit copyrights and their “opinion” on pricing should be at least as important as anybody else’s.
Joe: A publishers' opinion on pricing certainly applies to the wholesale price at which they sell their content to retailers. They've always controlled that. Publishers also insist on a recommended list price (books are one of the very few retail items that have the price printed on them). But unless the contract with the retailer states otherwise, that's where their opinion ends.
Mike: Agency publishers had a lot of experience with higher ebook prices that couldn’t be discounted before the DoJ stepped in and they apparently disagree.
Joe: Huh? Ebooks were being discounted, which is why publishers colluded to force the agency model on Amazon. The agency deal meant Amazon couldn't discount. When the DOJ stepped in, Amazon went back to discounting.

Okay, upon rereading your sentence, I think you're saying that the price- fixing publishers seemed to like higher prices.

Did they like them because they made more money? Probably not, because they had to give a lot of that money back to readers in the settlement.

Or did they like those high prices because they retarded the growth of ebooks and protected their paper oligopoly? How is that counter to Amazon stating that $14.99 is unjustifiably high? It seems to be sympatico. The price fixers wanted those ebooks to be priced high, and their justification was to protect paper. 

Mike: This elasticity measurement considers only sales of ebooks at Amazon. What is the impact on print book sales when the ebook price goes up and ebook sales go down?
Joe: It only considers ebooks because ebooks are the items that Hachette wants to raise prices on. Hachette and other publishers make higher profits on ebooks, but they don't run a cartel over ebook distribution like they do with paper.
Mike: What is the impact on the bookstore distribution network when ebook prices go up and ebook sales go down? It would be commercially irresponsible of publishers not to consider those effects as well.
Joe: What's commercially irresponsible is not giving readers what they want. In the past, publishers had all the control. They priced hardcover books as luxury items, and those who couldn't afford them either had to wait for the library copy or wait a year for the less-expensive paper version to come out.

Publishers no longer wield that power. It's understandable that they don't want to let it go, but you can't put that cat back in the bag.

Amazon's press release isn't meant to be a comment on the state of the paper publishing industry. It's meant to explain the current negotiation situation with Hachette, which is about ebook pricing.
Mike: It is true that ebooks live in a world where they compete with other media. It is also true that the they live in a world which includes print, also an important component of a publisher’s and an author’s economic world. This analysis is very short on measurements of the impact on print sales of lower ebook prices.
Joe: Print is important to my economic world. It's about 2% of my income.
Ebooks are 1% of Legandare's income. And, again, this pricing issue is about ebooks, not paper.
We know Hachette wants to protect their paper sales. Why should Amazon care about that? Amazon cares about the needs of its customers, and Amazon and Hachette can apparently agree on terms for selling paper books. How does your argument that Amazon isn't taking paper sales into account affect Amazon at all? That isn't Amazon's concern.
Mike: It is good to hear that Amazon accepts a 30% share for retailers as reasonable. Will they now extend terms reflecting that to all the non Big-Five publishers who are trapped in “hybrid” terms, giving 50% or more in wholesale discounts to Amazon for ebooks? Of all the points raised by Amazon in this document, this is the most consequential in terms of commercial impact.
Joe: You mean "trapped" as in "willfully entered into the contract"? I'd be fine with a 50% wholesale deal with Amazon. I'd love it if they heavily discounted my books. I'd love it even more if they sold them as a loss-lead. But I don't have a paper empire to protect.
Mike: How about the academic and professional title universe that never operated on trade discounts until Amazon forced them into the trade discount world recently?
Joe: I don't think you understand the word "forced" anymore than you understand "trapped".
I'll give you a correct usage: "Amazon was forced to accept the agency model because publishers illegally colluded, and they became trapped by those terms."
No one is forcing any publisher to accept Amazon's terms. Amazon isn't a monopoly. Those publishers are free to go elsewhere. Amazon isn't breaking any laws by being a fierce competitor and negotiator. The same cannot be said about Hachette.
Mike: The economics of those segments of the book industry are being devastated by trying to put them into the trade paradigm where they never belonged and never intended to be.
Joe: Yes, the world will weep over the loss of $200 textbooks. I'm getting teary-eyed just thinking of it.
Again, it is not Amazon's job to give life-support to a business model that no longer works, whether it’s 8-track tapes or textbooks.
Technology, and consumers, have moved on. Publishers also need to move on if they want to continue to be relevant. Go with the flow, or drown.

Michael Cader of Publisher's Lunch was also critical of Amazon's statement, and he says some things worth responding to.

Cader: As most of our readership has likely seen by now, on Tuesday afternoon the Amazon Books team put up another unsigned, closed to comment post (an exercise in what Barry Eisler ought to call shameful "pointless, pernicious, promiscuous anonymity") on the Kindle Forum. The post is said to offer "specific information about Amazon's objectives" in their negotiations with Hachette Book Group.

As to why Amazon doesn't allow comments, I'm puzzled by that, as well. They haven't allowed comments on any of their Hachette related posts. I doubt it would be because they fear criticism--Amazon tends to ignore criticism, even from the highest sources.

If I were forced to speculate, I'd guess--and this is a pure guess--that Amazon believes the comment thread would fill up with anti-Hachette sentiments, and that's not conducive to the negotiations they are currently involved in.

Or maybe Amazon truly fears that a pro-Hachette avalanche of posts would overwhelm them, as pro-Hachette authors have been lighting the Internets on fire with their fact-based, common sense posts.

(Can anyone point me to a single pro-Hachette fact-based common sense post? Anyone?)

Cader: If you have not read the post yet, check it out. It raises many questions, among them:
Amazon is very careful with their words, even if not elegant. The post begins, "A key objective is lower e-book prices." A lot of traditional media have written the post up as if it said "The key objective..." What are the other key objectives, Amazon? Why do your conversations with people in the trade talk about looking for your fare share of the "business efficiencies" produced by a rising ebook market and your investments, while your public words are only about pricing objectives?

Joe: Well, we agree that Amazon is careful with their words. It’s unusual to hear an observation like that leveled as a criticism. Does Cader prefer the Hachette approach, which is to clear English what a chainsaw is to a tree…?

That said, I'm pretty sure Amazon just agreed to a 30% cut of ebooks--that speaks directly to their business efficiencies of the rising ebook market, doesn't it? So they didn't just speak of pricing objectives. But since Hachette hasn't made any statements about pricing, we're left with the belief that this dispute is about ebook pricing, which is why Amazon is addressing that particular point.

Cader: Amazon says they have "quantified the price elasticity of e-books from repeated measurements across many titles" in their store. Will they provide that data to publishers? Will they do it for a variety of price points?

Joe: Have publishers released any price-point or sales data? No. We rely on third parties to attain that information, such as BookScan.

I find it interesting that Amazon is, finally, sharing some price point data, and Cader immediately wants more from Amazon and nothing from Hachette. It reminds me of that Louis CK joke about WiFi on airlines.

Amazon, like legacy publishing, has always been tight-lipped about sales figures. But with Amazon, authors get timely, easy to understand royalty statements.

Cader: Amazon keeps trying to push a public perception that most new ebooks are $14.99, overlooking the substantial number of titles at $11.99 and $12.99 -- and overlooking the post-settlement discounting provisions that led some publishers to raise ebook prices in anticipation of Amazon's discounting.

Joe: I had the impression that Amazon is focusing on $14.99 because that's the price Hachette is pushing for. Remember that the agency model is still in effect on Amazon, all the DOJ did was allow Amazon to discount those agency prices.

As for publishers raising ebook prices in anticipation of Amazon's discounting, I find it hilarious that there were abundant author complaints that Amazon stopped discounting Hachette titles. How about Hachette prices them fairly to begin with, in which case discounting wouldn't be needed?
Cader: And will they back up the contention that lower prices raises overall revenue in the form of advance guarantees, one publisher asks? Amazon is essentially offering an assurance that an ebook that sells 100,000 units at $14.99 will sell 174,000 units. Even if true, does that only work in isolation? E.g., if all $14.99 ebooks moved to $9.99, would the sales effect be mitigated as consumers are back to choosing among a wide swath of comparably priced books?
Joe: Well, we could always run a controlled experiment by using a parallel universe...
Oh, wait. We can't.
But we can allow Amazon to price ebooks where they choose, and publishers to wholesale those ebooks to Amazon for the price they choose. Which is how it used to be, except publishers hated the discounting so much that five of them colluded with Apple to fix prices.
Cader: Their figures consider a world of ebooks only. Their "total pie" is really just a piece of the pie. But publishers and authors are looking to maximize revenue across all formats. "Total revenue" on an ebook is only part of the "total revenue" for a new release book, and the hardcover edition still generates substantially more revenue per unit.
Joe: As I mentioned while responding to Shatzkin, this dispute is about ebook prices. Hachette is welcome to counter with a "total pie" argument, but Bezos believes "your margin is my opportunity". He's not in business to prop up the paper book market.
Cader: Publishers and authors are also looking to maximize exposure of their titles and revenue across all possible outlets. More viable outlets makings books available for perusal and sale is an essential part of the "healthy reading culture" Amazon talks about.
Joe: So it's Amazon's job to bolster its competition? It's one thing making books competitively priced with other media types. It's another thing to be competitive with other retailers selling books. Amazon wants low prices. It’s in Amazon's best interest if other retailers price books higher, or don't sell books at all. That's a no-brainer. Amazon's arrival on the publishing scene has given the industry a much needed shot in the arm. Writers, and readers, are benefitting. Amazon's position seems to be it wants those benefits to continue, but it isn't Amazon's job to enable the competition to compete better.
Cader: Of course it's in Amazon's interest to drive higher ebook sales -- where they have a 60 to 70 percent market share -- over print sales, where their market share is half of that or less, but it doesn't mean that is the solution for publishers and authors, or even readers.
Joe: As I stated above, my paper income is about 2% of my overall income. But publishers still have an oligopoly over the paper industry, and they want to protect that. This isn't an impasse. Readers will vote with their wallets. Because, for the first time ever, readers have a choice.
Cader: Tangentially, first-run movies would sell a lot of downloads on Amazon at most any price. The lower the price, the more downloads they would sell. Would that be good for the movie business as a whole?
Joe: Funny you should mention that -- because more and more pay-per-view movies are being released while the film is still in theaters, or in some cases before it is in theaters.
With some titles, like Transformers, the bean counters have decided a theater-first option is best. Others, like 4 Minute Mile, http://www.amazon.com/Minute-Mile-Watch-Before-Theaters/dp/B00LFE2558 are takign a different approach. And this seems to be good for the movie business as a whole, and for film lovers.
Cader: People in the business will smile at Amazon's writing, "Any author who’s trying to get on one of the national bestseller lists should insist to their publisher that their e-book be priced at $9.99 or lower." As we've demonstrated, it's harder than ever to get a regular new release ebook onto to Amazon's Kindle bestseller list, which now gives 40 percent to 50 percent of its slots to books Kindle Unlimited free trial members have clicked to download.
Joe: Uh, then maybe those publishers should enroll their books in Kindle Unlimited?
I just hit #11 on the Amazon Top 100 with Whiskey Sour, which was published back in 2004. I sold over 6000 ebooks in a week. I can get a ten-year-old book on the list with just a few ads, but giant publishers can't hit the Top 100?
But this is a straw man. Amazon is talking about lists like the NYT, which publishers deem to be extremely important (I've sold a few million books and never hit the NYT list). And if publishers want to get on the NYT or USA Today lists, Amazon is helpfully suggesting an ebook priced at $9.99 or less, because Amazon has data to show this is the best price point.

It just isn't a price point that publishers like, because they care more about losing power and therefore relevance (that paper oligopoly) than they do about losing sales.
Cader: We understand Amazon is playing to the crowd, where the idea has been embedded that agency pricing raised prices.
Joe: How could that idea have been embedded? Maybe because, under the agency model, prices went up? Isn't that what the DOJ proved? Why does Cader think five of the then Big Six colluded to fix prices? Were they trying to force Amazon to lower its prices?
Cader: But they way they phrase it in the post -- "the 30% share of total revenue is what Hachette forced us to take in 2010 when they illegally colluded with their competitors to raise e-book prices. We had no problem with the 30% -- we did have a big problem with the price increases" -- is factually wrong. eBook prices paid by consumers may indeed have risen post agency, but the agency publishers themselves did not increase prices. They lowered their prices to their retailers, and they eliminated discounting.
Joe: Huh?
Ebook prices paid by consumers went up. The publishers controlled those prices. And publishers and authors made less money. But this is all apparently okay as long as Amazon could no longer do any discounting?
Amazon has no problem with 30%, because that's what they take from indies. They did have a problem with higher ebook prices.

In the short run, Amazon made more money per ebook sale when the publishers forced the agency model on them, and they still had a problem with it because it meant higher ebook prices overall, which they didn't want.
Cader: "We had no problem with the 30%" is raising lots of questions from other players. Many publishers would love to limit Amazon's share to 30 percent.

Joe: And I'd love to sell my ebooks to Amazon at a 50% wholesale that they're free to discount. It all comes down to what sort of deal you're able to make with Amazon.

Cader: Smashwords founder Mark Coker wonders in our comments why that offer doesn't apply to the hundreds of thousands of Smashwords titles? "So agency is okay as long as it's accompanied by lower prices? Then why have they refused to allow Smashwords or other low-cost ebook distributors into their agency program?

Joe: I'll take a wild shot here: because Smashwords is a competitor?

Cader: We'll give them 30% *and* give their customers lower prices. If Amazon wants its customers to have lower prices, then why the doublespeak? And why then has Amazon been so stingy with free pricing?"

Joe: It's a mystery to me why Amazon doesn't see the value of free. They're leaving a lot of potential money on the table. But Amazon, like any company, is free to do business with whom it chooses, and how it chooses.

Cader: On Amazon's remarks about authors' interests and their share of ebook revenues, Coker adds: "Nice of Amazon to care about authors. But do they really care? If they care about the welfare of authors, then why for last four years has Amazon been robbing KDP authors every day via draconian price matching? Amazon routinely steals revenue from authors even when the price differentials are due to a competing retailer's error, and not the author's intention or fault."

Joe: I don't like KDP Select's exclusivity either. I also think Amazon should sell in epub format. I'd like to be able to make my books free whenever I want to. I've been telling Amazon this for years. But it's their house, their rules. If I don't like the rules, I can opt out of Select, or take my books off Amazon completely.

I don't expect Amazon to become altruistic, but since the days of DTP they have been operating according to a philosophy of enlightened self-interest. I have benefitted. So have tens of thousands of other authors. So have many millions of readers.

Publishers are correct to fear Amazon. Amazon is slowly disintermediating them. That's what this dispute is about. That's why Hachette wants $14.99 ebooks. Because as the ebook market grows, and the paper market shrinks, what’s the point of having a publisher? Most authors with even a pair of functioning neurons will cut out the middleman and take that share for themselves. 

Publishers are middlemen. Once they were essential middlemen. Now they are, as Barry Eisler says, a value-added option. If you find value in turning over ¾ of your ebook royalties in return for cover art and editing. 

Because when B&N closes, and paper distribution exists only for the big names like Patterson, Preston, and Turow, cover art and editing will be all the legacy industry can offer authors. And the legacy industry knows how lame that is.

Wednesday, July 30, 2014

So the Real Authors Guild is... Amazon?!

Joe sez: This is from Barry Eisler's blog. My comments to follow.
Barry sez: In case you missed it, today Amazon issued an update on its stalled negotiations with Hachette.  It’s a great read:  short, clear, and devastating to the meme that Hachette is in any way the good guy in this fight.  But if you want just the executive summary, it’s this:
Amazon wants most ebooks to be priced at below ten dollars; Hachette wants ebooks to be priced higher.

So far, so simple.  But what’s critical to understand is that lower ebook prices create more revenue — a lower price for the customer, and more income for the retailer, publisher, and author.  In other words, a win for everyone:
We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.
The important thing to note here is that at the lower price, total revenue increases 16%.
This is what Hachette opposes.  This is what the “Authors Guild” and “Authors United” are fighting to prevent.  More money for authors.  And not just that:
This is good for all the parties involved:
* The customer is paying 33% less.
* The author is getting a royalty check 16% larger and being read by an audience that's 74% larger. And that 74% increase in copies sold makes it much more likely that the title will make it onto the national bestseller lists. (Any author who's trying to get on one of the national bestseller lists should insist to their publisher that their e-book be priced at $9.99 or lower.)
* Likewise, the higher total revenue generated at $9.99 is also good for the publisher and the retailer. At $9.99, even though the customer is paying less, the total pie is bigger and there is more to share amongst the parties.
For anyone who follows Joe Konrath’s blog, none of this is news — Joe wrote a post over two years ago laying out why The Agency Model Sucks.  Legacy publishers know — they have long known — that the sweet-spot price for most ebooks (the point at which per-unit price multiplied by volume maximizes revenues) is lower than what they insist on charging.
So why do legacy publishers insist on high prices for ebooks?
As I started pointing out about three years ago, “The current business imperative of legacy publishing is to preserve the position of paper and retard the growth of digital.”  Why?  Because although the legacy industry offers various value-added services (at least in theory), the only critical service they’ve ever offered — the only one an author couldn’t get any other way — has always been paper distribution. Paper distribution is the foundation on which the legacy industry built its agglomerated business model.  That is:  “You want distribution?  Then you’ll have to take all the services you could have outsourced for a flat fee elsewhere (editing, jacket design, etc) along with it, and you’ll have to pay 85% of earnings for the agglomerated package.”
But in a digital world, authors don’t need distribution services from publishers.  In digital, individual authors have exactly the same distribution reach as any corporate publishing partner, and for the same flat rate of 30%.  Digital is changing the role of publishers from something authors needed to something authors might, for reasons separate from distribution, merely want.
Having the nature of your business go from “I’m a business necessity and the only game in town” to “If I can prove my value, authors might still want me” represents a cataclysmic change for legacy players.  Remove the criticality of distribution from the equation, and the entire nature of the publishing business model dramatically changes, with services that once upon a time could only be had as part of a mandated and expensive prix fixe meal now available as low-price a la carte items authors can order from the menu however and from whomever they like.
If any of this sounds familiar, it’s because it is.  Forcing someone to buy an unessential item as the price of being able to buy the essential one is called tying and it is frequently illegal, especially in the context of intellectual property.  Or, for another example of tying, recall the pre-digital-distribution era way the music industry allowed you to buy the one song you wanted:  by forcing you to buy the entire CD along with it.  There are many other examples.  What they all have in common is that in whatever context it develops, tying can only exist in the presence of disproportionate market power.
There’s much more to be said on the origins and nature of the legacy publishing business model; if you’re interested, here are some thoughts I offered in a Pike’s Peak Writers Conference keynote a little over a year ago and in a follow-up piece I wrote for The Guardian.  And here’s some terrific analysis from Porter Anderson at Writing on the Ether.
But even if you don’t want to dive that deeply into this topic, the main thing to understand is this.  When legacy publishers choose the price of your digital book, they are not doing it primarily to maximize your revenue (in fact, they’re doing it with the full knowledge that their price will shrink your revenue).  Instead, they are choosing that price primarily in the service of their strategy to preserve the primacy of paper.
To put it another way:
The legacy imperative of using high ebook prices in an attempt to maintain the primacy of paper costs legacy-published authors money.
Otherwise known, in legacy-speak, as “nurturing authors.”
Now, the biggest bestsellers in the industry — say, James Patterson, or Doug Preston, or Richard Russo, or Scott Turow — sell the majority of their books in paper.  After all, they’ve won the distribution lottery and their books are available in every airport kiosk, Wal-Mart, drugstore, and supermarket across the land.  So their interest in retarding the growth of digital — where the same distribution is available to everyone — and in preserving the position of paper is identical to that of their publishers.  It stands to reason they would fight to maintain the system that has made them so rich.  But if you’re a legacy-published author whose sales are increasingly digital, you need to understand that the legacy strategy of pricing ebooks high is costing you money.  Is that really something you want to help perpetuate?  Yes, it works for James Patterson, but what is it costing you?
Also, for the “Books Are Special Snowflakes” crowd:
Keep in mind that books don't just compete against books. Books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.
My favorite part of the update was this:
So, at $9.99, the total pie is bigger - how does Amazon propose to share that revenue pie? We believe 35% should go to the author, 35% to the publisher and 30% to Amazon. Is 30% reasonable? Yes. In fact, the 30% share of total revenue is what Hachette forced us to take in 2010 when they illegally colluded with their competitors to raise e-book prices. We had no problem with the 30% -- we did have a big problem with the price increases… While we believe 35% should go to the author and 35% to Hachette, the way this would actually work is that we would send 70% of the total revenue to Hachette, and they would decide how much to share with the author. We believe Hachette is sharing too small a portion with the author today, but ultimately that is not our call.
It’s going to be fascinating to see how the “Authors Guild” and “Authors United” try to spin this.  Fascinating in no small part because Amazon is taking the very position on digital royalties you would expect — indeed, you would insist on — from any organization worthy of inclusion of the word “Authors” in its marquee. Instead we have Amazon championing authors, and “Authors” championing publishers!
Imagine what the “Authors Guild” and “Authors United” could accomplish if they caught the pass Amazon just threw them and drove toward the end zone.   Instead, expect them to run in the opposite direction, as confused and frightened as creationists fleeing from carbon-dated dinosaur bones.
Look, I’m not saying anyone here lacks self-interest.  Of course businesses are self-interested and that’s not the point.  The point is, there’s enlightened self-interest… and selfish self-interest.  A guy who steals a car and a guy who buys one aren’t the same because, hey, each just wanted a car.  And in publishing, we have one camp that seeks to profit by keeping consumer prices high and author incomes low, and another camp that seeks to profit from lower prices and higher incomes.
Which side is deserving of your support?
Over to you, Authors Guilded and United...
Joe sez: For the TL;DR crowd:

If you signed Douglas Preston's letter, you picked the wrong side. 

Even if you're a millionaire bestselling author, driven by greedy self-interest, you're still screwing yourself in the longrun by siding with Hachette.


Preston: Unfortunately, Amazon's actions are hurting, most of all, the debut and midlist authors who haven't yet built up a loyal audience. I'm okay, and the bestselling authors, we have an audience and they're going to find our books one way or another.

Joe sez: Wrong, Doug. It's Hachette's actions that are hurting all authors, including you.

Amazon is trying to sell more of your books and make you more money by stopping your publisher from making ebook prices too high. 

Preston: But we're not against Amazon. And we're not for Hachette at all. We're really trying not to take sides. We're just asking Amazon to resolve its issues with Hachette without affecting authors, without dragging us into it.

Joe sez: I'm not judging you, Doug, but you're a complete pinhead.

See what I did there? I said I wasn't judging you, but I went ahead and judged you.

Exactly like you keep saying you aren't taking sides, but you keep asking Amazon to resolve its issues with Hachette.

If you weren't taking sides, you pinhead, you'd be asking Hachette the same thing.

Preston: But we're not fighting anyone's battle for them. I'm not even in contact with Hachette. They have nothing to do with it. We're just fighting our own battle.

Joe sez: Preston's complete lack of self-awareness astounds me.

Doug, how about you actually get in contact with your damn publisher and wield the power of Authors United, "power to face down one of the world's largest corporations", and tell those morons that they need to accept Amazon's proposal, which will make all authors more money?

Preston: We just want to be able to write our books, and have them sold fairly at the largest bookseller in the world and not have those sales blocked or impeded. If Amazon were a small bookseller, it wouldn't be so concerning. But they have 41 percent of the entire book market and, like, 55 percent of the entire ebook market. Amazon sells probably half the books I sell. So it's very concerning to me.

Joe sez: Then you shouldn't have signed away your rights to a corporation bent on exploiting you. Because if you want them sold "fairly" it should't be at the $14.99 that Hachette wants.

Hire a lawyer. Get out of your contract. Then you can deal directly with Amazon, and they'll give you 70% instead of 17.5%

But the problem, of course, is that Amazon pubbed and self-pubbed books are boycotted by B&N and most indie bookstores. 

Hey! Here's an idea! Maybe the surging, unstoppable powerhouse that is Authors United can do something proactive about that! How about... hmm, what could you do to make a huge impact?... I got it, how about a $70,000 NYT full page ad! That'll show 'em!

Preston: Books are different from toasters and wide-screen TV sets.

Joe sez: Ah, the appeal to emotion fallacy

This is what millionaire authors trot out when they can't say the truth:

We make a shit-ton of money selling paper books. That's what this is really all about.

Preston: "It was when the evidence emerged, that Amazon had been holding certain books  hostage and delaying delivery of other books as a negotiating tactic in a dispute with Hachette. I felt that was unfair. We [authors] had not done anything to Amazon and aren't party to the dispute. And I felt it was unfair of Amazon to target authors as a means of leverage. That's what gave me the idea that we should try to address the situation, to try to change Jeff Bezos' mind.

Joe sez: And who moved my cheese!?

Doug, I'm actually begging you now, please open your mind a teensy weensy bit and see that Hachette has been delaying negotiations because they want ebook prices to be higher.

Amazon has no obligation at all to sell any Hachette books whatsoever. They don't even have a current contract in place with Hachette. The fact that Amazon is still selling any Hachette books at all is a supreme act of generosity, which they are probably doing because they don't want to screw authors by completely removing all Hachette books from their store, which is entirely within Amazon's right to do.

How about you force Hachette to accept Amazon's offer? And maybe, at the same time, force them to double author royalties to 35%?

Oh, wait. I forgot. You aren't in contact with Hachette.

Well, at least you keep insisting that you aren't taking sides. 

Preston: I think most of us think that Amazon is a good company. We're grateful to it for selling our books. We've been a partner to it, we've been supporting Amazon from the very beginning, from the time it was a start-up. And we've felt a little bit betrayed by this. I'm speaking to you now, not as an official spokesman for anybody. That's how I felt personally, and it's turned out a lot of other authors felt the same way.

Joe sez: Ah, the harsh sting of betrayal. Because you've supported Amazon for so long. How selfless of you to do so, when Amazon has 41% of the book market and 55% of the ebook market. 

Maybe you should reconsider your contract with Amazon since you feel so betrayed.

Oh... wait. You DON'T HAVE A CONTRACT WITH AMAZON.

You actually have a contract with.... Hachette! They are the ones preventing you from having pre-order buttons on Amazon, because they are the ones failing to make a deal with Amazon to do so.

If you're going to feel betrayed, pick the right betrayer.

Preston: Is this going to be Amazon's MO [mode of operation] from now on? -- to hurt authors and inconvenience their own customers every time they run into a rough patch negotiating with a publisher? I guess our feeling is that that's not acceptable.

Joe sez: Is this going to be legacy publishing's MO from now on? -- to use their authors as pawns to sacrifice in order to control ebook pricing, which hurts authors and customers?

Is this going to be rich, entitled, self-interested millionaire NYT bestsellers' MO from now on? -- to use their celebrity in order to secure media attention so they can protect their positions as rich, entitled, self-interested millionaire NYT bestsellers?

Unlike you, I don't need to guess what my feelings are. That's NOT acceptable.

Preston: You can't outsource Lee Child to China. They should not be treated as if they're boxes of cereal occupying grocery store shelves.

Joe sez: How about we please let Lee Child do the talking from now on? 

I disagree with Lee about a lot of things, but at least he can ably defend his position. Lee wouldn't say something stupid like "you can't outsource me to China". Books are not special snowflakes, and Lee doesn't need to be outsourced to China because he is no doubt already selling truckloads of books there.

Comparing books to cereal boxes shows that you don't even seem to know what outsourcing is. And stop clinging to the belief that books are special. It is such self-interested BS.

We are entertainers. We aren't curing cancer. We aren't feeding the poor. We're incredibly lucky that we can make a few bucks doing something we love, which is a luxury most people don't have. But we don't deserve special treatment. Amazon removing pre-order buttons isn't equivalent to Alexandra burning. 

If you truly believe reading books is as essential as eating or breathing, take the money you've raised for the NYT ad and give it to www.firstbook.org

Preston: These are books and authors and writers whose livelihoods are affected by this.

Joe sez: Then force your publisher to negotiate.

Oops... I keep forgetting, you aren't taking sides, and you aren't in touch with Hachette. My bad.

Preston: (Amazon's previous offers to authors are) a lopsided proposal which would severely impact the publisher financially but wouldn't impact Amazon financially very much at all. It's almost like an attempt to ask authors to load Amazon's guns for them. And I don't think it's a serious attempt to bridge a gap, I think it's simply an attempt to divide authors from their publishers."

Joe sez: Why do I feel like I need to spoonfeed you common sense, Doug?

If neither Hachette or Amazon were making money off of Hachette titles, and instead the money went to authors, or charity, it would compel both companies to resolve this issue sooner.

As Amazon has said, Kindle books are only 1 percent of Lagardère Group's sales. Both companies can weather this storm, but something could be done to bring a faster resolution. Amazon has repeatedly tried to do that.

WTF has Hachette done in order to speed this process along? Why haven't you mentioned that?

Preston: There's a lot of stuff going around the Web, and views  being imputed to us, views being imposed on us that are not accurate. People saying [for example] that we're for higher ebook prices. Well that's absurd. We haven't made any comments about ebook prices. I think if you looked at our list of signers, you'd probably find that most of us were in favor of lower ebook prices and discounted books.

Joe sez: Doug, you can't say you want the state to execute a convicted murder, and then say you are against capital punishment. That's some serious cognitive dissonance.

The position you and Authors United are taking will result in higher ebook prices. Period.

Preston: And then they say we're calling for a boycott of Amazon. Absolutely not. We're not calling for a boycott. I'm an Amazon Prime member and I'm still using the company. I guess I'd put it this way: you can be against a war and still be a patriotic citizen. I'm an Amazon customer, I'm just taking exception to this one thing they're doing.

Joe sez: Doug, you're the one that said Amazon is boycotting authors. Which they aren't, by any definition of the term. 

Our letter asked readers not to boycott Amazon, because Amazon isn't at fault here. Authors United, and Stephen Colbert, are unjustly painting Amazon as a bad guy. 

When you start whining in public about being treated unfairly, what do you think will happen? Could a consequence of your actions possibly be that some readers will agree with you, and subsequently not shop at Amazon anymore? Do you think, maybe, that might happen?

For example, I don't have an iota of the untold power that Authors United has (I haven't sold billions of books, and I'm under no delusion that I'm one of the finest writers in the English language). But I can guess, as a consequence of this blog post showing my readers how absolutely wrong you are about this issue, some of those readers won't buy your books anymore.

I'm not calling for a boycott of Douglas Preston books. But in fisking you, I know that a certain percentage of people are going to think you're ridiculous, and they are going to voice their opinion with their wallets. As a direct consequence of me whining in public.

You most certainly can be against a war and still be a patriot. I can love my country without loving my government. But your analogy is poor.

By continuing to sell your books on Amazon, by continuing to shop at Amazon, while stating publicly how harmful Amazon is toward authors, it shows you are a hypocrite. 

A patriot against a war will refuse to fight in that war.

Preston: But I'll say this: there certainly should be room for both indie publishers and traditional publishers, for indie authors and traditional authors. I think we're all in the same leaky boat, and we should be bailing together. I think we should be friends. 

Joe sez: I'll be your friend, Doug. And as your friend, I'll give you some heartfelt advice: Stop doing interviews about this topic.

Indie authors are not in the same leaky boat that Hachette authors are, because we control our IP. We're not subject to the boneheaded negotiating tactics of our publishers. And your pandering to indies is, well, kinda creepy and kinda elitist in a "let's make friends with the backwards savages" kinda way.

But maybe I'm just reading you wrong. I know how interviews can sometimes fail to convey tone and intent.

Preston: Most of the world doesn't give a damn about books and reading, frankly. Ninety percent of the world not only doesn't give a damn about books, they're actually hostile to books. So traditional authors and indie authors have a lot in common and should be friends. Let's not fight. We're not against independent publishing at all.

Joe sez: The world doesn't give a damn? But, but, but books are special! They aren't like toasters or boxes of cereal!

Doug, allow me to let you in on something: indie authors aren't against legacy publishing. Indie authors are pro choice, and some indies will take legacy deals. 

But what all authors seem to be against is getting screwed. In fact, that's why you wrote your letter to Bezos. You incorrectly believe Amazon is treating authors unfairly.

In fact, it's the legacy system that has treated authors unfairly for decades. And it continues to treat authors unfairly. You don't seem able to grasp that, because you won the legacy lottery. You're rich. You have widespread distribution. You were plucked from the masses and given the star treatment.

The rest of us don't get that kind of treatment. But Amazon has allowed us, for the first time ever, to make some money and captain our own ships.

I'm not anti-legacy. I'm not pro-Amazon. I'm pro-author, and in this particular case, the interests of Amazon and of authors are aligned. 

The only ones who can't see that are the entitled millionaires and those suffering from Stockholm Syndrome.

Preston: I want you and everyone else to understand how much we are in favor of self-publishing and indie publishing. I personally am and other authors [in his group are]. So I say let's extend hands, let's shake hands, let's be friends, and not view ourselves in opposition to each other, because I don't think we should be.

Joe sez: Then stop going to the media and saying Amazon needs to stop hurting authors. Stop saying that Amazon is boycotting authors. Don't take out a full page ad that will paint Amazon as the enemy. Stop rejecting Amazon's offers to help the very authors you claim to be trying to help. 

Stop the stupid.

Preston: "Hugh is a nice person. And Hugh feels that Hachette forced Amazon to take these steps, that in order to get Hachette's attention, it had to do what it did."

In speaking with Amazon's Grandinetti -- "he's called me a couple of times" -- Preston says he's heard the same thing from him, as well, an assertion that Amazon, in Preston's take on Grandinetti's words, "had to do this to show Hachette that we were serious."

"But my response to that would be, 'Nobody forced you to do it. I mean, how old are we?' Look, we all have choices. And Amazon is a very powerful company...No one made it do anything."

Joe sez: This is exactly the type of stupid I'm talking about.

Hugh is right that Hachette forced Amazon to take these steps. Hachette refused to negotiate, even after their contract with Amazon ended. What was Amazon supposed to do? Would you allow Hachette to keep publishing your books if you no longer had a contract with them? 

But you don't address that, Doug. 

Russ has called you a couple of times. Has Hachette called you? Why don't you mention that?

Your response is "how old are we?" 

I dunno, Doug. Are we a bunch of petulant, whiny two-year olds who aren't getting our way so we take out a $70k ad in the NYT?

You keep defending Hachette while admitting you haven't even been in touch with them. You like Hugh but don't respond to his well-reasoned points, just simply disagree without defending your position or countering his. You blame Amazon, reject their offers, and apparently absolve all the shitty things your publisher does.

And you do this publicly. You're trying to get people on your side. 

And you want to be friends? Really? 

Preston: There's really a great diversity of opinion among the letter signers about such things as the right price of an ebook, how should publishing look at the future...what kinds of royalties authors should get...but the one united thing we all share is asking Amazon, as simple as this: just settle your differences with Hachette without hurting authors. That's all.

Joe sez: Amazon has made three offers to avoid hurting authors.

You don't care about authors being hurt, Doug. You care about Hachette. Every offer Amazon has made, you reject because you feel it will hurt Hachette.

You can't keep saying Amazon is hurting authors. It's 100% wrong.

By dismissing Amazon's offers, Hachette is the one hurting authors. And so are you.

Preston: If Amazon were to say, 'Okay, we'll put the [pre-order] buttons back, we'll go ahead and sell the books the way we did before -- and we're not going to do this again' -- I think we'd close up shop" on the Authors United effort.

Joe sez: Why stop there? Why not also ask Amazon for a pony, and a blow job?

But whatever you do, don't ask Hachette for anything at all. Just think what would happen if you did. I mean, you might actually be able to force them to accept Amazon's proposal of 35% royalties for authors, 35% to publishers, 30% to Amazon.

And if that happened, it would hasten the end of paper's dominance. And then you would lose all the perks you currently have.

This isn't about helping authors, Doug. It's about helping yourself. 

The inimitable David Gaughran has some questions for Doug at the end of the FutureBook interview:

1. Your comments focus a lot on the loss of pre-orders on certain Hachette titles. Are you aware that self-published authors and many small presses don't have a pre-order facility on Amazon? 

2. Do you have an escalator/bonus in your contract with Hachette which kicks in if you hit the New York Times bestseller list (or similar lists)? Is this the real reason you are so upset about Amazon removing the pre-order facility?

3. Your letter described Amazon's actions as a "boycott" when it is no such thing. Here’s what a real boycott looks like. Since October last year self-publishers have been banned, en masse, from the e-bookstore of the UK chain WH Smith. The company has given zero indication when this ban will be overturned. How come you guys have never written an open letter condemning this actual boycott?

4. Why is this the issue you decided to organize a protest about? If you really cared about the plight of the average author, why have you never campaigned to raise royalty rates, or remove toothless reversion clauses, or awful non-compete clauses? Why have you been silent about the exploitation at (Penguin Random House-owned) Author Solutions?

5. You say you aren't in favor of higher prices. I find this incredibly disingenuous. It's clear  that Hachette's aim in these negotiations is to take back control of retail pricing and/or restrict Amazon's ability to discount e-books. In other words, if Hachette prevails, e-book prices will increase. That's what you are campaigning for.

6. Your letter also complains that Hachette books are no longer being discounted to the same levels as before. Are you aware that Hachette is seeking to take discounting power away from Amazon? In other words, Hachette books will be discounted *even less* if Amazon listens to you and caves to Hachette's demands. Do you see the cognitive dissonance here?

7. You make reference to two of Amazon's offers to compensate affected Hachette authors, depicting them as either disingenuous or unfair. However, you fail to reference Amazon's first offer. That offer was to estimate lost book sales and pay out the respective author royalties from a pool, the cost of which would be borne equally by Hachette and Amazon. (Note: this was exactly what was agreed between Amazon and Macmillan in 2010). Hachette also rejected this offer. I'd love to hear how this first offer was either unfair or disingenuous. I'd also love to hear your thoughts on the complete lack of counter-offers from Hachette to compensate affected authors. It seems to me like Hachette wants to keep its authors in the firing line to keep the pressure on Amazon.

Joe sez: I'll add a few questions of my own.

8. You said our petition caught you by surprise. Did you even read it? Have you read any contrary point of view? Why haven't you responded to any of your critics? 

9. Do you understand that if Hachette accepts Amazon's offer, Hachette can still control wholesale price? In the pre-Agency model days, authors and publishers made more money per ebook sale. 

10. Have you ever negotiated with anyone? If Amazon shouldn't have removed pre-order buttons, what do you suggest it should have done when Hachette refused to respond to Amazon's attempts to negotiate, even after Hachette's contract with Amazon ended?

11. Why the hell haven't you contacted Hachette? You've done nothing but defend them, even when admitting you don't know what the negotiation is about. They're your publisher. Your lost sales are a direct consequence of their decisions. 

Now, I predict Doug isn't going to answer any of these questions. Maybe, if he gets publicly shamed enough, he won't run the NYT ad. But even if he doesn't, his mind is already made up on this issue, and no amount of common sense or facts will open his mind.

What Preston needs to do to help his cause is stop all activism. Every time he flaps his jaws, it empowers Hachette to stall negotiations longer. Also, because his position is so indefensible, and the comments he makes so damn stupid, he's become a better pro-Amazon spokesperson than an indie author could ever be. The more he yaps, the more public opinion turns Amazon's way. Amazon couldn't pick a better poster boy.

Stop it, Doug. Really. I'm trying to do you a solid here. Stop the petition. Stop doing interviews. Stop the NYT ad. Stop it all.

For your own good, and for the good of all authors.

Barry sez: It would be encouraging if Preston would respond to David Gaughran's excellent questions above. And if he would respond to the questions I asked in this post:

http://barryeisler.blogspot.com/2014/07/amazon-cancer-cure-stunt-to-separate.html

After all, isn't Preston concerned that his failure to meaningfully engage his critics is what's allowing "the most vociferous voices take over the online discussion"?

At a bare minimum, it would be a really terrific development if Preston and "Authors United" could offer even a single proposal for how Amazon and Hachette might resolve their impasse that doesn't involve Amazon simply capitulating to all Hachette's demands. Have another look at the last paragraph of Porter's post and you'll see this is exactly -- and only -- what Preston claims would be satisfactory.

Which, of course, is the ultimate laugh-line in response to Preston's persistent eye-lash batting demurral that he and "Authors United" aren't taking sides in this dispute. "We're not taking sides; we just want Amazon to stock Hachette's books on whatever terms Hachette wants!"

It's been my experience that the most partisan people believe they have no politics, that the most biased journalists believe they're entirely objective, and that the most destructive personality types truly believe they're good people with good intentions who will produce only good results. What makes people like Preston so pernicious is precisely this:  even as they fight someone else's battle, they're absolutely convinced they're as neutral as Switzerland. In other contexts, it might be funny, or it might be sad. In this one, unchecked, Preston's mypopia is apt to cause a lot of harm, which is why I'm glad to be one of the people who's working to expose "Authors United" for all the qualities Preston is too blinkered to see.