“Silence The Stories That Matter” – Decoding the Anti-Amazon FUD

"Silence The Stories That Matter" - Decoding the Anti-Amazon FUD DeBunking Amazon has long been criticized in certain publishing circles for the terrible crime of selling books that customers wanted to buy rather than the books the publishing clique wanted to sell.

It used to be that Amazon's critics used codewords like describing Amazon's recommendation algorithms as "narrow and inhuman" for not recommending the books that publishers that think are important.

Now the Huffington Post has revealed the new codewords. Today publishers are wringing their hands over the possibility that Amazon "might silence the stories that matter" (to publishers, that is) by using a "data-based approach to bookselling" in its physical bookstores.

For publishers, especially those who support the work of emerging authors, disempowered authors or authors whose voices aren’t in chorus with the mainstream, this data-based approach to bookselling is disconcerting.

Michael Reynolds, the editor-in-chief of Europa Editions, told HuffPost that Amazon’s ratings-based system isn’t conducive to discovering writers like the lyrical, wave-making Elena Ferrante, whom Europa publishes.

...

“While a new bookstore, any new bookstore, is generally good news, I can’t see how Amazon applying its unsatisfactory recommendation engine to a physical space is going to result in the kind of discovery experience a reader has when she enters any good brick-and-mortar store,” Reynolds said. “It is certainly not going to help with bringing about the kind of bibliodiversity that, with authors like Elena Ferrante, Muriel Barbery, Boualem Sansal and Domenico Starnone, we seek to cultivate, and that I think is more important today than ever.”

Dennis Johnson, the co-publisher of Melville House, agreed. “Things like Tolstoy are going to have lower ratings than the new book by the new YouTube star,” he told HuffPost. “Real literature is slowly not going to be available there.”

Amazon opened its first bookstore 18 months ago, but the current focus of publisher ire is the Amazon Books that opened last week in Manhattan.

Due to Manhattan's high rents, the new store is far smaller than previous Amazon Books locations. It lacks the chairs and open space found in other locations, and it also stocks fewer titles - 3,000, compared to 5,000 to 6,000 titles in the first Amazon Books in Seattle (the Chicago location carries 3,800 titles).

But in general, the new Amazon Books store is stocked along the exact same lines as the other six locations - its selection is based on what Amazon thinks people will want to buy.

The shelves are not stocked with the books the publishers want to sell, and that is a capital crime in the eyes of elitist publishers.

The publishers are not motivated by anything as venal as a profit motive; no, they are as pure as the driven snow. They merely want to publish important books.

The fact that those books have little relevance outside of Manhattan's publishing cliques is entirely beside the point.

image by Robbie1

About Nate Hoffelder (10074 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

56 Comments on “Silence The Stories That Matter” – Decoding the Anti-Amazon FUD

  1. “Silence the stories that matter” almost certainly is a snooty thing in the stories you’re quoting. But there really IS a reason to worry about Amazon’s primacy.

    If they become too central to our book-buying and book-reading, then they could (they might not, but they could) make ideologically driven choices that bring certain things to the top, and drive other things to the bottom of our shared intellectual discussions.

    Yes, those things would still be on the Internet and on Twitter or Facebook or whatever, but those are short and shallow approaches. For long-form intellectual exchanges, for in-depth analysis, nothing can replace books. (Print or ebooks, they’re all books!)

    I do worry that Amazon will eventually engage in subtle influence of our collective thinking — or even, in time, overt pressure.

    It’s one of the reasons that I do believe government should intervene in the book business, as they do in the rest of the media world, to prevent too much concentration of control in any one set of hands.

    Of course, I also see an economic danger to **all** publishers, including self-publishers, in the creation of a monopsony between us and our readers. This is even more true when that company doesn’t depend upon the book business to any great degree. But that is another topic.

  2. @Marion. You describe very well what is actually happening now and has been for some time. With respect, the assumption that we currently enjoy an environment free of influence from Publishers and Retailers simply does not hold up. The mere premise of the article, that Amazon uses a data driven approach in selecting the books rather than vague and subjective elitist concepts of literary merit, confirms this. Even if this was not the case, demanding government intervention on the basis that something may or may not happen in the future is simply not justified. Such demands have been made by large publishers and their proxies and so far have succeeded only in Europe, where the future will be delayed but not denied.

  3. I dislike the kind of “discovery experience” I have in normal bookstores. I usually discover that the shelf containing the genres I’m interesting is is fairly narrow and only carries the “big sellers” anyway. A normal book story gives me no chance to discover indie authors or less famous others.

    So no, I’m not keen on the “discovery experience” that normal brick-and-mortar stores offer me. Which is why I have only bought one or maybe two books in such a store in the last five years…

  4. @ Darryl: I made no assumption that publishers and retailers are not trying to influence what you read. But there are tens of thousands of each of them — not one!

  5. I think this is an argument with two valid sides. I do like the idea of Amazon making so much available to us so easily and I like the idea of customers and readers having more influence over what’s available. Considered in principle this sounds pretty good. On the other hand, look at TV, where that principle has had a lot of effect. Silly sitcoms and reality shows all over the place. Mcluhan was correct to call it a vast wasteland. Admittedly I’m biased. I haven’t owned a TV in years.

    The other side of that argument is that writers and publishers have long considered themselves arbiters of taste and, for the most part, they’ve done a pretty decent job of that. Lots of stuff fell through the cracks of course but we’ve always had lots and lots of good stuff to read. That system has worked well.

    My personal hope is that we have both. I want Amazon to continue to do what they’re doing. If it becomes a problem we can deal with it then. Or if it even looks like it will become a problem. Currently they’re doing a great job and if they falter I’m sure others will step in.

    I also hope the publishers figure this new world out and also do well. So far they’re doing okay. I hope that keeps up. I hope we all root for having both systems in available. Neither hurts our reading.

    Barry

  6. Publishers aren’t remotely a single group, doing things one way. Never have been, and never will be.

    Those that please readers do well, and always have. Those that don’t, go out of business. The profit margins are far, far, far too thin to allow anything else.

    In fact, almost all of the 100,000 active publishing imprints in the US try to please readers to the very best of their ability — and since they’re still in business, most are doing a decent job.

    Does this mean that they’re putting out books you like? No. But it’s very, very likely that at least some of the 900,000 new titles published every year in the US will please you.

    On the other hand, even the very biggest brick and mortar stores can only carry about 50,000 titles per year. There’s a pretty good chance they’re never going to do a good job in meeting the needs of every reader.

  7. Publishers have complained that Amazon wasn’t gatekeeping at all and that publishing would be destroyed by a “tsunami of crap.”

    Now they are arguing that Amazon might gatekeep too much by prioritizing some books over others.

    A. Both positions can’t be true and B. Publishers have actually silenced authors for all of publishing history by failing to publish authors *at all*.

    It’s ridiculous that this even requires mentioning.

    • Authors can always go to another publisher — they’re not all the same. That was my point.

      Most people in publishing were never upset that Amazon was not screening books that were published by authors. We know better than to care, and always did.

      We’re not even worried that Amazon might favor one book over another — as long as there are other stores that have a hefty market share.

      The only problem arises when Amazon owns the channel through which books reach readers. And, unlike publishers in all of history — that would mean that one organization owned access to readers.

      That’s a big, big difference from what publishers “did” to authors.

  8. @Marion: Your own words tell us why the big publishers hate and fear Amazon – without Amazon doing a single thing wrong.

    “100,000 active publishing imprints in the US”
    You say. How many of them can get their books into B&M stores? How many can afford to pay for a table or shelf up front to show off their books? Very few.

    “900,000 new titles published every year in the US”
    Same questions as above and the same answer, very few.

    “On the other hand, even the very biggest brick and mortar stores can only carry about 50,000 titles per year.”
    And a few big publishers are 99% of what you’ll find in them.

    And Amazon lays it all to waste without breaking a single law.
    Every book, ebook, audio book can be sold on Amazon. A self-published ebook can rub shoulders with one from a traditionally published one and the reader can chose for themselves. No table up front someone with deeper pockets can rent to give their books a boost. No indie title buried on a back shelf in the dark corner of a B&M store, it’s as easy to find as any of the others offered.

    If the big publishers think Amazon is a bad thing they can always pull their books/ebooks/audio books from Amazon – right? Well, no, not really, as Amazon currently sells over 40% of their books for them. And if they did leave, that would leave all those little guy offerings for Amazon readers to find instead of their more deserving titles.

    And that is why they hate Amazon. Amazon is in it for the buyers – the customers, not the suppliers. You can’t ‘buy’ a ‘best selling’ tag, you have to ‘earn’ it by being a best seller, and a big publisher has no advantages over any indie writer in the game. Write a good book and the buyers/readers will declare the winner.

    Oh, and as far as you wishing that the ‘government should intervene’, you might want to consider that Amazon has been playing the game within the current rules/laws. What rule changes clips Amazon’s wings will most likely clip the wings of the publishers, bookstores and writers too.

    • Allen F: I’ve never seen a publisher or even a self-publishing author (which does NOT include those who use “self-publishing companies”) who couldn’t get at least some of their books into at least some brick and mortar stores — if they followed the rules of the game.

      The problem is, as it always was, that this game is expensive, and high-risk, with a low profit margin even if you do well at it.

      Most micro-publishers (including those authors who have established their own publishing company, bought their own ISBN block, etc) don’t choose to try to get their books on bookstore shelves in more than a few carefully chosen stores.

      Again, that’s something different than not being able to do so.

      Amazon isn’t laying waste to publishers at all. Most of them are doing pretty darn well in competition with the scads of new entrants to the publishing races. Profits are up or stable, etc, for most of them.

      Amazon is letting authors found their own publishing companies (not that most realize that they’re doing so) with less investment. Some of them dig in and do really well.

      But that’s **just more competition** in a business that has always had so much competition that the extra doesn’t matter.

      I know you really want publishers to be upset by the success of self-publishing for novelists (non-fiction has been doing pretty well at self-publishing for decades). But honestly, they don’t care.

      What they DO care about, and what you should care about, is the implication of this pair of facts:
      1. Amazon owns access to your customers
      2. Amazon doesn’t need ANY authors or publishers. It doesn’t even need all of us put together.

      Think about that. If it doesn’t scare you, you’re really missing something big and bad and nasty — and it’s headed your way.

      • “The problem is, as it always was, that this game is expensive, and high-risk, with a low profit margin even if you do well at it.”

        And Amazon removed most of the risks and expense, meaning writers that couldn’t get their books in front of their readers can now do so – skipping trad-pub and doing it themselves.

        “I know you really want publishers to be upset by the success of self-publishing for novelists (non-fiction has been doing pretty well at self-publishing for decades). But honestly, they don’t care.”

        Ah, and that’s where you’re fooling yourself. They do care, a great deal it seems or they and their mouthpieces wouldn’t be whining so loudly.

        They care a great deal because a lot of books/ebooks are being sold without them getting their gatekeeper fees.

        If you haven’t seen it before, this might be of interest to you: http://authorearnings.com/report/dbw2017/

        “What they DO care about, and what you should care about, is the implication of this pair of facts:
        1. Amazon owns access to your customers
        2. Amazon doesn’t need ANY authors or publishers. It doesn’t even need all of us put together.”

        1. Is because no one else has bothered to put the customer first the way Amazon has. Do it better and they will come. (Have you seen the websites of some of these other companies? Dealt with them when there’s a problem? No wonder Amazon is doing better!)
        2. Amazon still needs those that make the things/ideas they sell – unless you’re claiming their AI written books are taking off? 😉

        “Think about that. If it doesn’t scare you, you’re really missing something big and bad and nasty — and it’s headed your way.”

        No, I think it’s heading ‘your’ way – or already chewing on your backside. If (big if as the CEO seems to be doing a good job – it’s his replacement we may have to worry about) Amazon starts getting ‘big, bad and nasty’ as you call it, the buyers and sellers will start looking for something less ‘bad and nasty’ and make it big in turn.

        • “2. Amazon still needs those that make the things/ideas they sell – unless you’re claiming their AI written books are taking off? ?”

          Actually — books are now a VERY small part of Amazon’s revenue. All of media including music and video and books, is now less than 20%.

          Every book and author could drop off the face of the earth tomorrow and they’d shrug.

          “No, I think it’s heading ‘your’ way – or already chewing on your backside.”

          Sure — the big targets get fleeced first. But Amazon has ALREADY started trimming the profit-fleece of some self-publishers. It can and will get worse, because Amazon has a positive ethical duty to force every single author and publisher as far as they can do so without impairing their profits, and as we’ve just seen — the existence of the book business has almost no impact on their profits.

  9. “Publishers aren’t remotely a single group, doing things one way. Never have been, and never will be.”

    2011 was so long ago, wasn’t it?

    • I’m sorry — which of the things that happened in 2011 are you referring to?

      • Well, it may have been late 2010, but apparently five of the big six acting entirely independently of each other (with no idea what the others were up too) entered into an agreement with Apple, which became Agency pricing.

        I suppose when an industry is labeled by many as a “Cartel” its being done so in a facetious manner, like calling the tall guy “Shorty”…

        • Trade publishing is 1/2 of the US publishing pie. The big 5 accounted for 75 to 80% of the total at their peak.

          That means that all 5, with their many (more or less independent) imprints accounted for the same fraction as Amazon does. But Amazon also cuts that swathe in the non-trade segments, too.

          And again, the 5 may have copied each others announced relationships with Apple but they wouldn’t have any reason to copy each others’ editorial policies even if their imprints all had the same editorial slant. And anyone who has compared Tor and FSG knows that they don’t.

          As for what the great majority of authors say — well, there’s no reason to believe that it’s true, simply because it feels true. That’s more related to the emotional dynamics of the situation than it is to related to objective reality.

          • “That’s more related to the emotional dynamics of the situation than it is to related to objective reality.”

            And you’re reasonably sure everyone critical of Amazon and what they “could/might/maybe/will” do with their power is looking through the lense of objective reality when making such pronouncements? That they have laid aside any emotions they have with regards to the issue?

            Why would all those authors feel the same way? If it weren’t true, what has publishing done recently to disprove their “feels” as it were?

  10. Allen F: The rule that Amazon has broken is the one that says no media outlet should own access to a hefty portion of the media available to any one geographic or demographic group.

    • I know more than a few residents in smaller communities throughout the US who would say Cable companies are in violation of that rule a lot more than amazon is…

    • That’s a ‘rule’? Where? As I’d like to see it used against B&N a few years back, or AT&T/TWC/Comcast right now when they block towns/cities from doing their own internets.

      No one is forcing anyone to use Amazon. The same can’t be said of those internet providers where sometimes there are no other options for internet.

      • B&N never hit 70% of the trade market, let alone 70% of all markets.

        It’s not about force. There have always been “natural monopolies” and “natural monopsonies.”

        We have rules about breaking up even those monopolies/monopsonies when they are contrary to the public interest. They’re generally lumped under the name of “anti-trust” laws, because most aren’t “natural.”

        Amazon is already using its power to force its vendors to surrender profit margin to it or to use allied companies. It can only get worse.

        Amazon’s managers have an **ethical duty** to use their power to take away all the available profit, even from authors.

        Authors may be the last targets, because you’re the hardest, but it will get around to squashing everyone, sooner or later.

        • “Amazon is already using its power to force its vendors to surrender profit margin to it or to use allied companies. It can only get worse.”

          You mean like Walmart does? (Google Walmart and Snapper Mowers sometime.)

          What’s sad is every point you make we could make about internet providers in most areas, yet the DoJ isn’t breaking them up.

          And all you threats are ‘Amazon could’ and ‘Amazon might’, where as we’ve seen the big5 and apple ‘do’, and B&N ‘do’, not this could/might business.

          I remember childhood tales, a chicken whose sky was falling and a little boy crying wolf. The sky is only falling for those that used to skim money off the works of others (publishers and agents are among them) and there may be a wolf out there, but if you keep calling Amazon that before they show any teeth people will have learned to ignore you.

          • Allen F: Amazon is doing more to take profit from the big companies for NOW. But it has already forced self-publishers to go from a 20% discount on print books to a 40% minimum discount, and to use CS instead of other POD printers.

            Do you really think that they’ll stop there? Why?

          • @Marion: You mean like Walmart forcing sellers to meet their price points or they can’t get their product into Walmart?

            Unlike my internet provider I can shop more places than Amazon and Walmart.

            If Amazon gets too bad to deal with the writers will be forced to go elsewhere – just like a lot are going indie/self-pub rather than sign bad contracts from trad-pub, it got bad so they left that sinking ship.

            Though that is another reason for the trad-pub types hate and fear Amazon, they are just another supplier as far as Amazon is concerned.

            Oh, that’s what I keep forgetting to ask you; If Amazon is so ‘evil’, pray tell me who is ‘better’ or at least ‘less evil’ that sells books/ebooks and whatnot that is giving indie/self-pub as good or possibly a better deal.

          • Allen F: Most vendors refuse to sell to Walmart. Walmart isn’t such a large chunk of the market that they must. That’s an obviously false comparison.

            Amazon isn’t evil. It’s dangerous to everyone in the book business, especially including self-publishing authors. Big publishers are better placed to sell elsewhere.

            Why don’t big publishers refuse to sell through Amazon? For EXACTLY the same reason that Amazon is dangerous. Because they own a hefty chunk of the access to readers.

            But obviously, anyone who reads Publishers’ Lunch or Publishers’ Weekly, or any other trade publication can see that every large publisher is trying a large number of things that might reduce their dependence on Amazon.

            And so, by the way, are the smart self-publishing authors who get most of their income from writing.

            It’s not working well for anyone, but we’re all out there trying.

          • @Marion: “Amazon isn’t evil. It’s dangerous to everyone in the book business, especially including self-publishing authors. Big publishers are better placed to sell elsewhere.”

            “Why don’t big publishers refuse to sell through Amazon? For EXACTLY the same reason that Amazon is dangerous. Because they own a hefty chunk of the access to readers.”

            And ‘why’ do you think Amazon owns that ‘hefty chunk of the access to readers’? It couldn’t possibly be because they are helping readers find what they’d like to read could it?

            What I mostly see from the NYTs/The Guardian/Publishers’ Lunch or Publishers’ Weekly, or any other trade publication is ADS, rants that Amazon is breaking laws – laws that the DoJ doesn’t seem to actually find them breaking. They remind me of those stock market annalists that whine that Amazon should be making stock holders more money rather than putting it back into Amazon to try new things.

            “It’s not working well for anyone, but we’re all out there trying.”

            Trying to do ‘what’ exactly? There’s not much you can be ‘trying’ if there’s nothing better to use instead. No one but the old guard wants Amazon to just ‘go away’, so they could try to regain their ‘gatekeeping’ duties (and the lion’s share of the money for each book sold.)

            Unless and until something ‘better’ comes along I’d suggest you smile and make hay while the Amazon sun shines, though saving a little for a rainy day is always a good idea. (Unless of course you’re a publisher, agent or bookstore that is already seeing the rain of all those indie/self-pub types that are no longer trying to beat a path to your door. In that case I hope your umbrella is in good repair.)

          • Allen said, “Trying to do ‘what’ exactly? There’s not much you can be ‘trying’ if there’s nothing better to use instead. No one but the old guard wants Amazon to just ‘go away’, so they could try to regain their ‘gatekeeping’ duties (and the lion’s share of the money for each book sold.)”

            Trying to create, support or find another retailer who can attract as many readers as Amazon.

            Also, trying to find a way to sell directly to fans of our authors.

            As for making hay while the sun shines — the sun is setting. Amazon is demanding a larger part of every sale with every incremental change. And they keep making changes.

            Yes, the DOJ is ignoring the issue. I suspect that they will only take action when one of three things happens:
            — Amazon pulls books for their political content (which I doubt will ever occur)
            — The last alternatives close, and Amazon owns all book retailing except for the trickle of direct to reader sales (which will be a little late to take action).
            — The closure of the Big 5 and of the hundreds of major independent publishers [ defined as the houses that sell between $5 million per year and $100 million per year, after discounts and returns]. That will again be a little late.

        • Allen said: “And ‘why’ do you think Amazon owns that ‘hefty chunk of the access to readers’? It couldn’t possibly be because they are helping readers find what they’d like to read could it?”

          OF COURSE that’s true. Amazon is the best book retailer that has ever been. They’re also pretty darn good at other types of retailing. So what?

          Authors, no matter how they’re published, aren’t competing with Amazon.

          Publishers, whether traditional or self-publishing authors, aren’t competing with Amazon.

          So, the fact that Amazon has gotten its stranglehold on ALL of us by being incredibly good at retailing only means that we’re going to be in really, really bad shape when Amazon’s demands for greater and greater discounts, etc, get to the point where publishers (self and traditional) can’t meet them any more.

          You seem to think that Amazon is a publisher competing with traditional publishers. Or that traditional publishers are upset because there are all these novelists who can suddenly do without a major house.

          NONE of that is the problem, nor have mainstream houses ever made a fuss about that stuff.

          It’s the percentage rates that we’re forced to pay to Amazon, and the other fees, and so on. And for the self-publishers who have already been squeezed by Amazon, the issues are EXACTLY the same.

          It’s all about how big a piece of every sale Amazon is taking. The competition between books is no big deal — it’s business as usual, with one, and only one exception.

          The exception is that the level of unit or dollar sales for any given level of popularity is dropping. This is true for self-published books, just as for traditionally published. But it’s not dropping all that much, nor is it likely to continue to drop for long. There are only so many writers, and they can write only so many books. We’ve pretty much maxed out on that one.

          • @Marion: Okay, so you don’t like “how big a piece of every sale Amazon is taking”. Is there someone ‘taking’ less that readers can find what they’re looking for?

            On that note, why do you think there are so many indie/self-publishers out there? It couldn’t be they didn’t like how much trad-pub/agents were ‘taking’ for the writers’ hard work could it?

            And I see another reply as I was typing this.

            No, the DoJ isn’t ignoring the issue because there isn’t an issue they can act on yet. Amazon doing well and the big5 not getting their way is not a crime.

            Have you seen many trad-pub contracts over the years? They seem to be averaging less money and more rights as time goes on, perhaps the DoJ should be looking into them instead.

            And you bring out the ‘close of the big5 and all the other publishers’, missing the fact that the only people that will miss them will be the publishers and agents as the old trad-pub writers go indie. Fewer middlemen means the writer gets more per sale even as the reader pays less.

            And that is the main reason for all the ADS, the middlemen fearing that they’ll no longer be able to skim profits from the work of others.

          • “There are only so many writers, and they can write only so many books. We’ve pretty much maxed out on that one.”

            You know, I’ve heard variations of this the past 30 or so years.

            One of these years it could even become true. But the data suggests otherwise.

  11. What’s sad is every point you make we could make about internet providers in most areas, yet the DoJ isn’t breaking them up.

    Cable companies are a regulated monopoly, because of the cost of laying cable, just as phone companies are. The question is “Are they regulated well enough?”

    And personally, I agree that they do a terrible job at customer service, and that this should be addressed.

  12. “Trying to create, support or find another retailer who can attract as many readers as Amazon.”

    None of the Big 5 have the willpower or longterm vision to do such a thing. It would mean spending a lot of money for no short term gain, and/or patterning with someone who wants a say in how things are done. Past publisher attempts to create their own websites have been, at best, barely successful.

    “Also, trying to find a way to sell directly to fans of our authors.”

    That would be thru the authors website, which in many cases they themselves will have set up. And honestly, if an author is willing to go thru that trouble, why are they going to give a publisher a percenatge of the money spent on their website. What logical argument could a publisher make for such an arrangement?

    “As for making hay while the sun shines — the sun is setting. Amazon is demanding a larger part of every sale with every incremental change. And they keep making changes.”

    Is the publishers rallying cry “Only Wet Babies like change?”

    “Yes, the DOJ is ignoring the issue.”
    Actually, during their investigation of the whole Agency price fixing trial, the DoJ investigated Amazon and determined they weren’t breaking any laws.

    “I suspect that they will only take action when one of three things happens:
    — Amazon pulls books for their political content (which I doubt will ever occur)”

    Can they do such a thing from a legal point of view?

    “— The last alternatives close, and Amazon owns all book retailing except for the trickle of direct to reader sales (which will be a little late to take action).”

    Then they’ve earned their monopoly legally. But at the same time, why blame Amazon for this? Is it their fault their competitors went out of business? A competent business would be able to compete with Amazon, and Amazon could not get that large unless its competitors do things that allow it to take that market share.
    As much as it annoys people with just a passing knowledge of the law and no knowledge of the Sherman Anti Trust act, Businesses that produce a superior product and/or are well managed may disadvantage their competitors while not violating antitrust law. Unless Amazon somehow achieves dominant market share thru improper conduct, such as exclusionary or predatory acts, the DoJ can’t do anything.

    “The closure of the Big 5 and of the hundreds of major independent publishers [ defined as the houses that sell between $5 million per year and $100 million per year, after discounts and returns]. That will again be a little late.”

    See above.

    • Publishers invest a minimum of $20,000 in a mid-list trade book. Retailers stock (and return) a book.

      You really can’t compare what Amazon does for a self-published author and what a mainstream house does.

      Amazon gets “Retail Distribution Center” discounts on print books. Those are comparable to wholesaler discounts, and are much higher than the ones independent retailers get.

      If a mainstream publisher makes unreasonable demands, you have lots and lots of alternatives, including self-publishing (starting your own publishing house), and always have had.

      As Amazon continues to demand more and more, we have fewer and fewer alternatives.

      It sounds, though, as if @Allen F is much more familiar with anti-trust laws, including the Sherman act, than I am.

      But natural or created, Amazon owns too much access to readers, and that gives it much too much power.

      As for it being illegal for any retailer to refuse to sell certain types of books — of course it’s not. Retailers choose what to sell, and what not to. It’s completely legal. It’s not even a restriction on the views that reach the public IF there are other retailers.

      (And before anyone asks about the First Amendment — censorship is only illegal when a government says you can’t publish or sell X. When a private business refuses to do so, that’s legal.)

      • “Publishers invest a minimum of $20,000 in a mid-list trade book. Retailers stock (and return) a book.”

        Please pull the other one – it has bells on it!

        I know I’m not the only one thinking you pulled that number out of your backside – can you show us a link or document showing this mystical $20K spent per midlister?

        “You really can’t compare what Amazon does for a self-published author and what a mainstream house does.”

        You’re right, we can’t compare them, but let’s try – shall we?

        Selling self-pub through Amazon (not Amazon publishing) requires the writer to get their book edited themselves, provide a cover and format it for kindle. Oh yeah, and decide what to sell it for. Depending on the location and price point, the writer will see 35/70% of the selling price. The writer still owns the copyright to their story and can change the story/cover/price as they feel like within Amazon’s rules and can withdraw it from Amazon sales if they so desire.

        Now let’s see what happens with a mainstream house. First the writer has to land an agent – who will suck 15% out of anything the writer might make dealing with a trad-pub. Then there’s trying to actually get a trad-pub interested in the writer’s work (Anybody have the slush pile odds for this year? I know it was a few hundred to one a few years ago.) This could take a year of trying to find an editor at one of the trad-pubs that likes it enough to run up the flagpole and see if the bosses will salute it. If you get that lucky they’ll offer you a contract, one that basically means that for a small sum (or sometimes nothing these days) the writer signs away all rights to their work, the editor might change the whole meaning of the story, the cover can be crap, and the ebook too overpriced for anyone to spend on an unknown writer. The writer has no say or control after signing that contract.

        Hmmm. Full control and the ability to fix/change things if needed or no control and at the mercy of others (and trad-pub contracts aren’t known for their mercy.)

        “Amazon gets “Retail Distribution Center” discounts on print books. Those are comparable to wholesaler discounts, and are much higher than the ones independent retailers get.”

        So? If that’s illegal why aren’t you crying for the DoJ to go after the publishers for not matching prices with all distributors, this isn’t an ‘Amazon’ issue.

        “If a mainstream publisher makes unreasonable demands, you have lots and lots of alternatives, including self-publishing (starting your own publishing house), and always have had.”

        Just like you do with distributors, just because the others don’t want to spend the money Amazon did to make it work better for the buyers isn’t Amazon’s fault.
        Perhaps if the trad-pub websites didn’t look like train wrecks people could actually by books/ebooks there, but once again, not an issue caused by Amazon.
        And yes, this is why trad-pub and their middlemen are upset, writers are skipping them and publishing on Amazon and other sites without trad-pubs blessings.

        “As Amazon continues to demand more and more, we have fewer and fewer alternatives.”

        I’m sorry, what exactly are you talking about? If Amazon demands too much then people will find ways to go around them – just as indie/self-pub goes around trad-pub, the gatekeeper gets no more fees once the fence comes down.

        “It sounds, though, as if @Allen F is much more familiar with anti-trust laws, including the Sherman act, than I am.”

        No, but I do have a nose that can detect BS stuffed straw-men. Please point out to us how Amazon has violated the Sherman act or any other anti-trust laws. Notice I didn’t ask for hand-waving ‘they could/might/someday’, I want you to point out which laws they are actually breaking right this minute. The future doesn’t count – if it did then I could have you tossed in jail for the murder I’m sure you’re going to commit someday soon.

        “But natural or created, Amazon owns too much access to readers, and that gives it much too much power.”

        Says somebody who seems to be upset that readers are ignoring them. B&N was a ‘big thing’ a while back and drove a lot of other stores out of business – did you protest them then? Amazon is the current ‘big thing’, and as long as the boss keeps putting the buyers/readers first any other distributor is going to be playing catch-up. And Amazon only has that power as long as they make their customers happy, lose that and they’ll fall just like B&N is now.

        “As for it being illegal for any retailer to refuse to sell certain types of books — of course it’s not. Retailers choose what to sell, and what not to. It’s completely legal. It’s not even a restriction on the views that reach the public IF there are other retailers.”

        Another straw-man. You keep making claims of what the future will hold if Amazon isn’t controlled/muzzled/neutered/chained down. Tell you what, I for one am willing to believe everything you say, you just need to give us the winning numbers for the Saturday night Texas lottery game (for this coming game – not last weeks! 😛 ). Give us those tonight so we’ll all know you can see at least two days into the future.

      • “But natural or created, Amazon owns too much access to readers, and that gives it much too much power.”

        Again: Power it obtained legally, by providing better pricing and better customer service, among other factors. All the actions it undertook to achieve this share of the market place were things publishers could have done at anytime as well, and while they may not have been able to stop Amazons growth, its share of the market could well have been smaller. Traditional Publishing had plenty of opportunities, starting in the late 90’s, to not only get it’s foot in the door, but to dominate the ebook marketspace, and they threw it away, more than once.

        Until Amazon abuses the power it has obtained to the detriment of its customers, nothing can be done. Arguing that Amazon must be stopped before it can do such things is something straight out of Minority Report. Until they actually break a law, arguing that they be broken up before they have the opportunity to do so is not only illogical, but the first step in a slippery slope you really don’t want to go down.

  13. The $20k is an estimate based on 25+ years running the finance and ops sections of book publishing companies, and consulting to smaller ones. But here’s a brief run-down.

    — Cover Design: $1500 (remember, we’re talking about books with a baseline sale of 10k copies, where the extra 5 to 10% sales that a GOOD cover generates compared to a cheap self-pub budget one is another 500 to 1,000 copies, so it’s a good investment)
    — Line edit and copyedit $4 to $5 page, for 256 to 320 pages, $1000 to $1500
    — Text design and layout $3 per page, for 256 to 320 pages, $750 go $900 (includes file conversion to pdf for print, add $200 for 2nd conversion to ebook)
    — File conversion $250
    — Proofreading for pdf $2 per page, and for ebook, $2 per page, $1000 to $1200

    Total direct fixed cost: $4700 to $5550

    Paper, Printing and Binding: $1.50 per copy, for 10,000 copies (which is actually low, because it doesn’t include returns or marketing) for $15,000

    Marketing: $1500

    Total upfront spending by publishing company, excluding advance to author: $22,050 in this example.

    Is that the way a self-publishing author would do things? Of course not. The self-pub author takes a reduced number of copies sold in trade for a much higher contribution margin per copy, and ends up with roughly the same net income FOR THE AUTHOR.

    But the publishers don’t face the same sets of parameters, and this turns out to be a better deal for them, and about as good a deal for the author, in total.

    And before you start citing AuthorEarnings, of COURSE I read their reports. Doesn’t everyone who works in publishing finance? Their numbers look at different things, but don’t invalidate these numbers nor even contradict them.

    • “Total direct fixed cost: $4700 to $5550”

      That is a little lower than I would estimate. But then i also include marketing in the marketing.

      • Marketing was in the variable costs, rather than the fixed. But the marketing that they do is B2B, rather than B2C, in most cases. The publishers mostly focus on marketing to bookstore buyers, major long-lead reviews, libraries and such. They also coach the author on the B2C portion, but that’s costed into overhead, not direct costs.

    • “The $20k is an estimate based on 25+ years running the finance and ops sections of book publishing companies, and consulting to smaller ones. But here’s a brief run-down.”

      I’m guessing that your ‘estimate’ was BC right? (Before Computers)

      I need to change jobs if any publishers are actually paid $1500 for some of the covers we’re seeing – heck between the coping/cropping and just bad covers we’ve be seeing I could have a couple of kids make better ones (and pay them in all day suckers.)

      Some of the errors I’ve been seeing in trad-pub new author/midlist books suggests they’re doing little if any editing of any type – much less paying much for it.

      Text design and layout $3 per page? Was that back when they were hand setting the type? $200 to convert a pdf to ebook? Dang but I’m in the wrong business!

      Proofreading for pdf $2 per page, and for ebook, $2 per page? Once again, I find it hard to believe in these so claimed expenses.

      And the reason trad-pubs want the writers to go out and social media their books is because trad-pub doesn’t see the need to market new author/midlist.

      Your list reminded me of the music industry, ‘Hey, new band – you guys sound great, here’s a $25K signing ‘bonus’. Of course you ‘must’ use our studios to make the disk at $1K an hour, use our mixing tech at $500 and hour ect …’ Funny how there was usually no bonus left by the time the disk was made.

      Of course if trad-pub is actually paying that much for what little they’re getting in return then I can understand why they’re having problems, and why indie/self-pub is taking off like it is.

      And of course I almost forgot this was suppose to be an ADS rant…

      It’s Amazon’s fault that they allow indie/self-pub types sell ebooks and print on demand books without first spending the $22,050 that trad-pub does for a similar book/ebook.

  14. The correct comparison is between publishers and publishers, not publishers and retailers.

    Amazon doesn’t publish your book when you self-publish. YOU do (or if you use a Pay to Publish company, they do — but many people call that self-publishing).

    Let’s look at apples to apples, not apples and bananas.

  15. When B&N owned a smaller piece of the book retailer market they were protested too. Obviously, and of course.

  16. Allen: You seem to have this whacked out idea that publishers are supposed to be retailers, or that they’re in competition with Amazon for manuscripts, or some such.

    You also seem to think that publishers resent the success that self-publishers have, and that this has some connection to why they are upset with Amazon.

    But you’re very, very, very wrong.

    Books compete with books. Publishers don’t compete with (self-) publishers. That’s why the book business has always been so collegial and people have always helped each other regardless of which house they work in.

    There really isn’t any reason to be upset that another publisher (self- or trad-) is selling a lot of copies. It has absolutely no negative impact on anyone in the business that there are books by some other house or imprint that are doing well.

    Self-publishing authors are just more publishers. No big deal. There are always more manuscripts out there.

    If mid-list fiction becomes unprofitable for traditional houses, because the average sale per title drops, then the number of novels they publish will drop. The volume will move to something else. No big deal, and business as usual.

    But it is highly unlikely that the mass market paperback will vanish in the next couple of decades. The blockbusters will still come out in that format. And that takes a LOT more money than what I was talking about above. All paid 120 days or more before the sales revenue rolls in. With no guarantees you’ll get it back.

    Authors will want someone else to take that risk. Publishers will be the source of that capital.

    The problem publishers have with Amazon is not that they’re good at bringing in customers. It’s not that their Kindle succeeded where other ebook efforts didn’t. It’s not that self-publishing now works for novelists.

    The problem is that there’s a CONSEQUENCE to their natural monopsony. That consequence is that they have a lot of power over the entire book business, including self-publishers.

    B&N cannot exist without books. Ingram can’t either. But Amazon doesn’t need ANY book sales. They’re maybe 10% of the total. (We only know the total for all media combined, which is 20%, but it’s unlikely that books are more than half of that number.)

    Amazon could kill the book business dead, self-publishers INCLUDED, and shrug.

    This is a very lop-sided distribution of power.

    Ethically, Amazon’s managers have a fiduciary duty to their stockholders to USE that power to force us, all of us, to surrender more and more of the total available profits on book sales.

    They will behave ethically, and drive us, all of us, to at least the edge of bankruptcy. They MUST.

    Knowing that, smart (self-) publishers need to be looking for alternative channels, with every bit of creativity and intelligence and money that they have, while we still can. It’s Strategy 101.

    Anything less is begging to be made extinct.

    And I’m done arguing about this. You want to ignore the obvious. Good luck with that.

  17. Wow. Just…wow.

    If I were to write a thriller about what Amazon might do, I’d never get it published traditionally, because it would be to fantastical to believe, and marketing wouldn’t know how to market it.

    You honestly think if Amazon decided to stop selling books, the industry as a whole would die? That in this digital age of e-commerce Kobo, Ibooks, some new startup couldn’t come in and pick up where Amazon left off?
    Heck, You could start selling self published books by other authors on a business website, but at this point, why try to compete with amazon? If Amazon does, as you say, kill the book business, I guarantee you more than one company is going to be created to fill the void. Amazon knows this as well. They aren’t stupid. If they were, they never would have gotten to where they are now.

    I do appreciate your comments on this thread though, thanks for replying.

    Andrew

    • Since there’s no ‘smoking gun’ to Amazon doing anything wrong/illegal, the ADS types need to make up scary bedtime stories of what Amazon ‘might’ someday do.

      Well, scary for those with nothing to currently fear as I’m forced to guess the ADS ones already have plenty to fear from Amazon and its perfectly legal actions.

      That is why the ADS from NYTs/big5/AU/AG, ‘anyone’ can publish and sell books/ebooks on Amazon, anyone. And that scares the horse-apples out of them.

      I can write a tall tale of whatever length it need be to tell the story, have someone help me edit/clean it up, find or pay to have a nice cover made and put it up for sale on Amazon. What’s even better is I still own the rights to it and have complete control, so if there’s a missed error or formatting issue I can fix it and the e-readers will see it the next time they update. (And even paying professional editors/artists isn’t going to cost that quoted $20K plus!)

      Have you noticed the big5 overpricing their ebooks? That hurts new writers because most readers won’t shell out a lot of money to see if the unknown is any good. Where the indies/self-pub can price theirs cheaper than a cup of coffee and still get more from each sale than what trad-pub will pay their writers for an overpriced ebook sale.

      So for any writer just starting out (and for many a midlister), unless trad-pub gives one heck of a sign-up bonus (isn’t happening) then indie/self-pub is the way to go because readers follow writers they like – not who publishes them.

      Which upsets those publishers (and agents) – the loss of control over what’s being offered to the reading public, and since Amazon is putting indie/self-pub books and ebooks right next to the ones from the big publishers we get the ADS – because Amazon doesn’t see the big boys as ‘special’, just another book/ebook to sell.

      And Amazon understands ‘why’ it’s on top right now, and they know how easy it would be to fall off their game and let a new upstart take over. So I don’t see Amazon pulling all the dumb ‘They might do this to us all!’ stunts the ADS crowd keeps whining about (just because they’d do it if they had half the chance doesn’t mean Amazon has to …)

  18. Andrew: I didn’t mean to say Amazon would refuse to sell books. I meant that Amazon will:
    — keep demanding a bigger share of the list price (which is effectively 40% for POD printed, up from 20%, 55% for offset printed, and 30% for ebooks)
    — demand more fees for things like co-op,
    — force lower prices, because its supply curve on handling books is different than the supply curve for (self- and trad) publishers

    and other things that benefit it, and harm author-publishers and traditional publishers.

    It will continue to do this, even as it causes more and more pros to quit self-publishing and more publishing companies to collapse, because they don’t need to care about books. And they don’t need to care about books because they’re a small fraction of Amazon’s total business.

    You can say that publishers will go elsewhere, and so will authors, but in fact they can’t. Why?

    You’re absolutely right that Amazon has a lock on customers because it serves them well. That was, after all, my point! And logically, we can only sell to our customers in the places where those customers shop.

    Which brings us back to the original warning: Amazon has a lock on our customers, and it doesn’t need to care about us — ANY of us in the book business. That puts us in a very dangerous place, whether self-published or not.

  19. Andrew: You also blamed publishers for failing to try to create a better retail environment than Amazon has. But the two functions are nothing alike. Companies that do publishing well, rarely do retailing well.

    Similarly, Amazon’s publishing arm (not KDP which does file conversion for authors that publish their own books, but the part that actually PUBLISHES books) isn’t all that good at the publishing part. This despite having more information about what works and what doesn’t than any publisher in history.

    Some things are a better fit for those who do retailing well. Just look at the dozens of failed attempts at getting ebooks off the ground before Amazon tried it. Those weren’t stupid or short on resources — but they weren’t done by people who were good at retailing.

    They’re VERY different skill sets.

  20. Marion,

    It’s been quite obvious since the beginning of e-publication that Publishers don’t get retail. I had a Softbook in 1999, i remember plugging that into the phone jack and downloading $20 ebooks that came out six months after the hardback because publishers didn’t want to “lose” sales. Butthat’s because publishers don’t see readers as their customers, do they?

    The fact that twenty years later, they are pricing their ebook’s above the price point for their paperbacks, and have fought tooth and nail to keep such pricing is more than ample fact they don’t get retailing. The fact that many publishers look at a spreadsheet and think selling 1000 ebooks at $14 is good, but selling 2500 of the same ebooks at $7 is wrong and devalues the written word is more than enough proof they don’t get retailing. They aren’t looking at the fact they sold 1500 more books, are they?

    Publishers aren’t forward thinking. They aren’t nimble, they do not react well to new things and new situations, are loathe to take risks, and at the end of the business cycle, they will die because of that. Not because they aren’t retailers. But because they refuse to listen to any retailer telling them what they could do to sell more books better.

    Case in point: Amazon.

    It’s the worlds largest retailer. It’s one of the top companies in the world at search and SEO, it has decades of sales data it can use to back its decisions with, and a customer database that is the envy of every other company out there. Hands down, bar none, it is the BEST RETAILER on the planet.

    And Publishing response to Amazons sales data, price points, and customer buying trends was to spit in Amazons eye and enact Agency pricing, using price points Jobs essentially made up out of thin air. And publishing actions since then have been to dig the trench deeper, clap their hands over their ears harder, and say “Nanananananananana” louder, when they aren’t trying to convince the world what Amazon “might” do. For companies that don;t do retail, how is ignoring one of the best retailers out there helpful?

    Publishing is dying, through mostly self inflicted wounds. They are being replaced by a legion of publishers who can put out a product that’s just as good as, and in some cases better than, what comes out of New York. They can price competitively, change prices quicker, react faster, to their readers, who they realize are their customers, And the vast majority of them do so on a platform that, while it may not cater to their every need, makes them available to every person in the world with internet access, lets them keep the majority of their earnings, and provides them the real time data they need to make business decisions.

    Amazon is smart enough to know it has a good thing going there, and it’s smart enough to know that if they screw that up, those authors will leave for a different platform, and believe me, if Amazon does try and screw over those publishers, they know there will be an exodus. Are they walking a fine line? Yes, and they know it.

    Traditional publishing on the other hand, wants me to pay $15.95 for the hardback, $15.16 for the paperback, and $13.99 for the ebook of the latest Pulitzer prize winner. And publishing still wants to insist Amazon is something to worry about?

  21. Publishers do NOT set print prices higher than ebook prices. Look at the list price — the lower price for print is something that AMAZON did.

    Amazon and publishers both run very similar pricing models. They find the same demand curves. But publishers have different supply curves than Amazon does. Therefore they find that their maximum total profit (margin per copy X copies sold) is going to be in different places.

    Then there are the tactical and strategic considerations. That’s one reason why Amazon is discounting print. It eviscerates bookstores.

    Publishers are run by smart and aggressive thinkers. When they’re doing things that YOU think are stupid, the chances are that they’re seeing a picture that is different than the one you’re seeing. They may be wrong occasionally, but mostly not.

    There are times when it’s far smarter to let someone else launch a market, and to come in as the second big launch, for example. There are other times when what is smart to do for a book that will sell a couple of thousand copies is very different from what makes sense for a “big book.”

    Most larger traditional publishers are doing pretty well, and not going out of business at all.

    As for Amazon caring about authors leaving and going elsewhere? Why on Earth would they? I really don’t understand your point there. Amazon is VERY numbers driven.

    If ALL book revenue is less than 10% of their revenue, I can’t see them carrying about all publishers and all self-publishers put together and in total, let alone some fraction of the self-pub authors.

    Seriously — you have NO leverage. That’s why Amazon has been forcing self-pub authors to give up half of their profit margin in print. And if you think that they’re not going after the ebook crowd sooner or later, I can only say I find that charmingly naive.

    • “Publishers do NOT set print prices higher than ebook prices. Look at the list price — the lower price for print is something that AMAZON did.”

      Just as the bookstores do, what’s your point?

      “Then there are the tactical and strategic considerations. That’s one reason why Amazon is discounting print. It eviscerates bookstores.”

      Bookstores do the same discounting of print, still looking for your point. (Other than ADS that is.)

      “Publishers are run by smart and aggressive thinkers. When they’re doing things that YOU think are stupid, the chances are that they’re seeing a picture that is different than the one you’re seeing. They may be wrong occasionally, but mostly not.”

      And yet Amazon, the company that knows how to sell things to consumers has proven them wrong each and every time.

      ‘Ebooks are just a fad,’ says the big5.

      ‘Properly priced ebooks sell like hotcakes!’ Amazon proves (at no added cost/cut to the publisher/author.)

      ‘We don’t like ebooks undercutting our paper offerings – we’ll keep Amazon from lowering the price with agency!’ the big5 bellowed.

      ‘Fine, if we can’t give our readers a properly priced ebook, then we’ll properly price the paper/hardback books,’ Amazon replied.

      Funny thing is that AU/AG never said a word about how agency hurt the sales of some authors, but they were quick to whine when Amazon ‘reduced’ the discount they were giving on those paper/hardback books. I wonder why they weren’t whining at the big5 for setting those prices so high in the first place …

      “Most larger traditional publishers are doing pretty well, and not going out of business at all.”

      If you remove the numbers games from the buyouts and consolidations you’ll find they aren’t as healthy as you seem to think.

      “If ALL book revenue is less than 10% of their revenue, I can’t see them carrying about all publishers and all self-publishers put together and in total, let alone some fraction of the self-pub authors.”

      Ah, but they want to be the place buyers go to buy and that includes things to read. And that’s why you don’t and can’t ‘get’ Amazon, they are there for the ‘buyer’ not the seller. So they need only offer as good of a deal or better than the seller can get anywhere else.

      “Seriously — you have NO leverage. That’s why Amazon has been forcing self-pub authors to give up half of their profit margin in print. And if you think that they’re not going after the ebook crowd sooner or later, I can only say I find that charmingly naive.”

      The big5 have no leverage either, they don’t dare try pulling their offerings from Amazon. And that ebook crowd helps sell Amazon’s e-readers, so Amazon likes/wants/needs them more than they do the big5’s overpriced agency ebooks.

      Oh, and the only ‘charmingly naive’ one here seems to be ‘you’, as every trick the big5 has had Amazon has countered and come out even more ahead, and any trick the big5 might try that could impact Amazon would hurt their other resellers even more (or haven’t you figured out why they ‘didn’t’ agency their paper/hardback books? Because then B&N could no longer slap on those ‘40% OFF!’ tags on those books no one would bother paying the full price on.)

      The big5’s choices are becoming more clear each AE quarterly review, they need to start pricing their books/ebooks to sell without Amazon/others needing to discount them, and they best start paying their writers better before the trickle leaving them to go indie/self-pub becomes a flood.

      At the rate things are snowballing, I give it another year, three at the most before most of the new big5 ‘big hits’ will be ones already big hits in the indie world that the publishers will have to beg (and pay handsomely for) the rights to publish.

      YMMV of course.

  22. Coming to the conversation a bit late, but I have a couple of observations.

    “Publishers do NOT set print prices higher than ebook prices. Look at the list price — the lower price for print is something that AMAZON did.”

    Yeah, all it does is sell more books overall. Bummer. And that little “This price was set by the publisher” you see on some listings on Amazon is what, a typo? And you do know that per the last agreements they made with the big 5, Amazon lets them set the prices on ebooks, right? So when the Paperback in $7.48, and the ebook is $13.99, is that the publisher ignoring the retailers knowledge of the market, or the publisher knowing better than the retailer?

    I know what goes into making an epub, I know what goes into making a print book, and I know it doesn’t cost more to make that epub. So why is it twice as expensive? It certainly isn’t market forces deeming that to be the right price point, a brief look at any AE report would tell them that.

    “Publishers are run by smart and aggressive thinkers.”

    Aggressive yes. Smart is a debate I am not sure you would win, based on the past ten years of evidence alone.

    “When they’re doing things that YOU think are stupid, the chances are that they’re seeing a picture that is different than the one you’re seeing. They may be wrong occasionally, but mostly not.”

    Look, it’s not my fault Traditional Publishing picture is still very much’Paint By Numbers’. They made their bed, and now they’re complaining about the mattress.

    Name a business decision they’ve made in the past ten years which has turned out to be a positive thing for the industry, authors, and readers.

    Agency Pricing?
    Taking on Amazon over pricing?
    Ebook prices higher than print prices?
    DRM?

    “Seriously — you have NO leverage. That’s why Amazon has been forcing self-pub authors to give up half of their profit margin in print.”

    Well, when Amazon gets close to keeping the 85% Traditional publishing keeps, I’ll get worried. Until then, I’ll keep working with them. Because I have leverage. I have more leverage with Amazon than I do with any traditional publisher, and more importantly, Amazon knows this. I can take my work and sell them elsewhere: Smashwords, Kobo, Ibooks, D2D, my own website. Leaving Amazon means I’m just giving up the current largest internet based marketplace for my books, which is a marketplace Amazon wants to keep. Amazon is walking a fine line with some of their choices, and they know it, and they know if they push to far enough people will walk away to other platforms, and their share of the market falls. Maybe Amazon will be OK with that. Maybe they’ll keep going until they drive all the self publishers away. Then all a competitor like Kobo has to do is NOT BE AMAZON when it comes to how to treat self publishers and their market share will grow, and Amazons will shrink, and readers will still be reading.

    Whats traditional publishing going to be doing while this is going on? What…innovations…is it going to come up with to make me as an author consider them a viable option? Something new and aggressive? Or the same old paint by numbers picture they’ve been selling the past hundred or so years?

  23. Todd: The publishers set the list price of the print edition, and the ebook edition, so that the ebook costs less.

    Then Amazon discounts the PRINT price, so that it’s lower than the ebook price.

    They do this because it hurts bookstores. Does that clear things up?

    • The only reason Amazon isn’t discounting ebooks (which they were) is because of the qig5’s ‘agency’ games – as you should know.

      B&N and other B&M amd online stores also discount books – just as Amazon does. Once again, what is your point other than ADS?

      And Amazon does it because it benefits the buyer, discounted or not the publisher – and therefore the author – get paid the same amount for each sell.

  24. “Todd: The publishers set the list price of the print edition, and the ebook edition, so that the ebook costs less.

    Then Amazon discounts the PRINT price, so that it’s lower than the ebook price.

    They do this because it hurts bookstores. Does that clear things up?”

    That the Ebook is $13.99 before the print book is discounted by Amazon speaks volumes as to what they value. And it isn’t bookstores.

    I cannot tell if your being willfully obtuse with this point of view. Amazon doesn’t do it because it hurts bookstores. That’s a side of effect of the real reason they do it:

    To help customers. Because customers will pay between X and Y for a product, not X plus 10 if that’s outside of Y. If Amazon wanted to hurt bookstores, they wcould price everything at a penny and eat the losses. Because they could from a financial point of view.

    Case in point, as any look at AE data will show you:
    Book prices rise, sales fall.
    Book prices fall, sales rise.

    And I find it hard to believe its hurting bookstores since their number HAS GROWN in the past ten years. So, if Amazon is trying to put bookstores out of business, it’s failing. Maybe they should take a page out of what the box stores did in the 80’s and 90’s, you know, when traditional publishing was fighting the good fight against corporate entities wiping out the individual bookseller that catered to their buyers needs….oh wait….that didn’t happen.

    Look, a Traditional sells publisher hardback book to Amazon, list price is $29.95.

    Amazon discounts price to $10.00

    Does Amazon pay publisher for that book based on $29.95 or $10.00 price? Is amazon not allowed to take a loss if it chooses to?

    In the last round of Contract negotiations, Amazon agreed to remit more money to the Traditional publishers if they set their price points lower, IE Set your price at $15.00, get 30%, set your price at $12.00 get 40%. And publishers are consistently on the high side of that.

    Why?

  25. Todd: Amazon and traditional publishing aren’t in competition for authors.

    Amazon is a retailer NOT a publisher. They sell the books of all publishers, including self-publishers, and on very similar terms. They don’t care if you’re publishing your own book, or a major house is.

    The problem with Amazon is very simple. We (self-publishers and all other publishers) need Amazon far, far, far more than it needs us.

    Books are about 10% of Amazon’s total sales. That’s nothing.

    Amazon is about 60% of mainstream houses’ sales, and something like 90% of self-publishing authors’ sales. That’s life-or-death time.

    You can say that authors will take their books elsewhere, if Amazon treats them badly, but they didn’t when Amazon took HALF of their available profit by forcing them to stop doing the 20% discount through LSI, and insisting that they do the 40% discount through CS.

    They won’t be able to do anything about it, when Amazon does the same thing to the ebook world, either.

    Traditional publishers are in the same boat, almost. They’re trying like hell to keep other retail channels open and flowing, and viable, but it’s not working.

    THAT’s what traditional publishers are worried about. Not authors.

  26. Todd: Amazon, like publishers, sets prices for two reasons:
    1. To maximize profit on that item
    OR
    2. To accomplish a strategic goal that is worth losing a little profit.

    Customer focus is a tool toward getting the best profit. They’re not legally or ethically allowed to do anything else. The managers in any publicly held company owe their fiduciary duty to all the little folks whose money is invested in the company (usually through big mutual funds or insurance companies these days, but still, usually little folks in the end).

    Many producers of goods, including book publishers, use a technique known as price windowing in order to get the maximum profit from a given product/title. In the case of books, it starts with a high price for print and ebook, and then the price drops lower and lower. That is, as I’m sure you know, why publishers price some ebooks as high as the prices you’ve quoted.

    In the case of books, the ebook edition typically has costs equal to about 60% of the print edition’s costs.

    Therefore, when you see a publisher price the ebook at more than 60% of the LIST price of the print book, not the price Amazon is selling it at, but the MSRP upon which Amazon pays the publisher, then you can tell that the publisher is either saying that the demand curve of ebooks is different than for the print edition, or that they have a strategic reason to want the print edition to sell better than the ebook.

    You may think that they don’t like ebooks because authors can use them to go around the mainstream houses, but that ship has sailed, even if they felt that way — and I don’t think many of them did.

    No, they want bookstores to do well.

    And while non-affiliated bookstores are increasing in number, the drop in chain bookstores more than overwhelms that change. (Remember Borders and all the other chains that no longer exist?)

    Bookstores are not increasing in number. You’re looking at a partial stat.

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