The past 10 days or so have seen lots of chest beating and crying unto the heavens by some members of the publishing community. Oh the gnashing of teeth and the blind leaping onto bandwagons as they roll off the cliff of reason. How easy it has been for these writers to cry against the evil that is Amazon, all the while refusing to look beyond the headlines or even read the headlines to see what is really happening.
Last week IPG (Independent Publishers Group, a book distribution company) announced that Amazon failed to accept new contract terms that would have been so much better for IPG’s clients than the current contract. We were told how Amazon was being the big bully and wanting better terms for itself to the detriment to IPG, its clients (publishers) and therefore writers. Without knowing what these wonderful new terms would be, writers hit social media sites condemning Amazon. How dare Amazon refuse to accept terms that would be better for the other party, for writers?!?
But let’s look at this. First of all, at the time of the announcement, we didn’t know what those so-called wonderful terms were. IPG all-too-conveniently didn’t say what they were. Nor did IPG detail what terms Amazon proposed and it turned down. Then there’s the fact that IPG is the middle-man. Just because terms are better for it, that doesn’t mean they will be better for the publishers using them, much less for the authors. Remember, authors may create the product but we get the smallest amount of the sales price of anyone else in the chain. But I can understand why writers were up in arms after reading the IPG announcement. Amazon was once again trying to screw the publishing industry. Evil Amazon! (yes, the sarcasm meter is on here.)
Then came the announcement that Amazon had removed IPG distributed e-books from its catalog. Oh the cries of outrage became howls. Authors’ fists pumped in the air like workers of old as they marched against the evil regime. How dare Amazon remove their titles! Didn’t Amazon know it was hurting authors by doing so? It had a duty to keep those titles in the catalog and for sale. Bad, Amazon, bad.Facebook was ablaze with authors rallying around the cause. Blogs flogged Amazon for being an evil capitalist machine out for no one but itself. And then SFWA (Science Fiction and Fantasy Writers of America) entered the fray.
SFWA leadership decided to stand by the few authors who had titles distributed by IPG. They would show their solidarity with the common man, er writer, and take action. They’d show evil Amazon that it can’t push people around. So, without consulting the member-at-large, SWFA leadership decided to redirect all product links on its pages from Amazon to other online stores. The only caveat to that was that if the book was only available through Amazon. In that case, the link would remain.
Solidarity! Solidarity! Solidarity! SWFA and others march unerringly toward the cliffs with the other lemmings.
What everyone seems to have forgotten in all this is that Amazon is not the big evil when it comes to publishing. The problems the industry faces now have their roots in practices that were outdated before Amazon was founded. Business plans have failed to evolve with changing times, changing technologies and changing consumer demands. How quickly these same authors have forgotten how the big box stores like Barnes & Noble came in and wiped out the majority of our neighborhood bookstores. How quickly they then over-expanded until they flooded the market. And now that practice, as well as other poor business decisions, have these big box stores in trouble.
Don’t believe me? Where’s Borders? Where’s Bookstop? Barnes & Noble has been trying to spin off Sterling to become more financially stable. That hasn’t worked so Sterling is no longer on the market. Instead, B&N is once more considering spinning off the Nook division.
But let’s continue. IPG presented Amazon with these wonderful terms for itself and its clients and Amazon had the audacity to decline to sign on the dotted line. Then, gasp, it removed those e-book titles. How dare it?
My question is how dare it not? Amazon no longer had a contractual right to sell the titles. It did the correct thing in removing them. After all, whether you like it or not, Amazon is a company. It has shareholders it has a duty to. That duty is to make money in return for their investment. I know that’s awful in the minds of some, but it is the truth. Just as it is true that IPG is in the business to make money.Even SFWA admits that Amazon has the right to decide who to do business with. But what is telling is that, while admitting that only 4,000 e-book titles or so were involved in the IPG dispute, SFWA was redirecting all links away from Amazon as long as the books weren’t exclusive to Amazon. There is nothing in the SFWA letter to say this is applying to just e-books. No, ALL BOOKS are involved.
But the authors who are beating their breasts and pumping their firsts have no problem with this. You must protect the few at the expense of the many.
The double-standard about this hatred so many in publishing have for Amazon continually amazes me. None of these authors cried “FOUL” when Barnes & Noble, and then other bookstores, announced it wouldn’t sell books published by Amazon. No, they actually applauded the move. After all, how dare Amazon have its own publishing arm. It’s out to kill traditional publishers. It is only enticing authors away and then it will turn on them because Amazon is evil.
I’m not going to say there won’t come a day when Amazon changes the royalty structure for self-published authors or small presses. It very well may. But the responsibility falls to us to be prepared for that day. In the meantime, we’re foolish not to take advantage of the tools available to us and, like it or not, Amazon is one of them.
Another example of the double standard is the deafening silence in the wake of Barclay’s announcement that it will not distribute one of its titles to any online bookseller. Their reasoning, to protest Amazon’s “unfair practices”. So, they don’t like Amazon but will “punish” all online stores. I’m sure Amazon is quaking in its boots at the removal of one title and will soon capitulate. Yes, I’m rolling my eyes as I type this. But the point is, Barclay is removing the title from a number of venues and yet the authors pounding their chests and pumping their fists are silent. I can only guess their reason is because the evil one was mentioned so they didn’t read any further.
Nor have I heard these same authors condemning Apple for refusing to carry an e-book in iTunes/iBooks because, gasp, it had a link in the back of the book in the references section to an Amazon page. GASP. It linked to a book Apple didn’t carry. Not an e-book, if I remember correctly, but a hard copy. Guess what, boys and girls, Apple doesn’t sell hard copy. Not yet, at any rate. But no one is up in arms about this because, sigh, Amazon is involved.
As I sit here writing this blog this morning, I have the news on. A commercial just aired for a live show later this month at the American Airlines Center. The music in the background is “Do You Hear the People Sing?” from Les Miserables. How appropriate. I see these authors in my mind’s eye marching shoulder to shoulder, fists pumping as they call for solidarity against Amazon. But they aren’t marching toward the guns of their oppressors. No, they are marching toward the edge of the cliff, blindly supporting an industry that, if it doesn’t quickly change its operating model, will soon fall.
And, like it or not, these authors are playing a role in the decline of the industry. How? By doing exactly what they are right now. By getting on their facebook accounts and alienating a very large part of their readership by saying not to buy from Amazon. Guess what, authors, the Kindle still holds a major market share when it comes to e-readers. As long as your publishers continue to insist on putting DRM on your titles, most readers won’t jump through the hoops, hoops that are technically illegal around much of the world, to convert that title bought from B&N or Kobo, etc., to be able to read it on their Kindle.
Guess what else–the reading public doesn’t understand why an e-book should cost as much as a hard copy of the book. No, don’t go spouting the tripe about how it costs the same to make an e-book as it does a hard copy. That dog don’t hunt, especially not when there is a hard copy being produced. You don’t edit the book twice, once for the hard copy and once for the digital version. You don’t make two different covers for it. I could go on, but I won’t. Why? Because you have dug your heels in, put your head in the sand and are going “lalalalalalalalala” until it’s over.
The time has come for writers to take control of their careers. I’m not saying every writer should self–publish. Why? Because not every writer wants that. Not every writer is capable of doing everything that is needed to self-publish, either because of time constraints, personal preferences, etc. But now is the time for writers to demand accountability from their publishers. That includes demanding to know why publishers are using distributors for e-books to sites like Amazon and B&N where it is simple to publish on your own. Middlemen add costs that publishers will take out of the whole before paying the author. But even more than that, it is time for authors to demand their fair share of royalties on a book. Remember, without the writer, there would be no book.
Wake up and realize that while Amazon isn’t pure, it is still the 800 pound gorilla we need to work with–at least until there is a viable alternative. It is not the beginning and end of all that wrong with the publishing industry. If you want to rail against something, writers, read your contracts and your royalty statements. Ask yourself why publishers are trying to claim digital rights to books when contracts were signed long before e-books were even thought of. Ask yourself how your books can still be on the shelves of physical bookstores more than two years after publication and yet your publisher tells you “it just didn’t catch on with the readers” and declines to pick up your option. Ask yourself why you haven’t earned out more royalties than your advance. Ask yourself why the quality of editing, copy editing and proofreading from your legacy publisher has been declining over the years.
Or, continue gnashing your teeth, beating your chest and pumping your fists in the air as you walk off the cliff, alienating readers and cutting yourself off from what most likely is your largest online market.
Cross-posted to The Naked Truth and Mad Genius Club.
The Worlds of Amanda S. Green 
I agree that a lot of authors are overreacting to the hype against Amazon, not realizing what a great boon they really are to writers. Their royalty terms are more than fair and they have given writers an almost limitless opportunity for their work to be published and available to the masses of readers.
Exactly, Larry. But then, I’m a cretin and don’t realize that we should be marching for the good of the few…sigh.
So…because you don’t know the terms of the contract IPG and Amazon are disagreeing over (why should you?), you assume that publishers, writers, writers’ organisations, and book retailers are vilifying Amazon for no justifiable reason?
Do a little research. You’ll find that we have many reasons to fear and, yes, resent Amazon’s approach to business. They want the market in their pocket, and if they are allowed to continue vastly undercutting retail prices by selling below cost (Amazon’s revenue comes from advertising, shipping and other products, not books), they will eventually kill all serious competition, resulting in a monopoly. I assume you know why a monopoly is a bad thing, since you feel qualified to comment on matters of business.
Everything publishers are doing right now is an effort to prevent Amazon from creating a monopoly. Are pubs protecting their own bottom line? Of course; they’re businesses, that’s what they do. They just happen to be protecting everyone else in the process.
Full disclosure: I work at a bookstore. A real one, with walls and shelves and people who actually care about books. Right now, the selfish, backward publishers are all that’s standing between us and total destruction at Amazon’s hands.
Does Amazon, as a business, have the right to grab for as much of the market as they can fit into their incredibly deep pockets? Monopoly laws aside, I suppose they do. Do publishers, retailers and, yes, authors, have a right to fight back against a hostile takeover of our industry? You’re damn right we do.
Amazon tries to push us off a cliff, and you call us lemmings for pushing back.
Addendum: Since you mentioned them, I feel I should point out that Borders went bankrupt because their last management team was imported from a chain of grocery stores. They believed they could run a bookstore the same way. Not surprisingly, they were mistaken.
Andrew, let me give you a little background. I am a writer. I am an editor. I work for one of the small presses that uses Amazon, B&N and other online retailers as well as operating its own webstore. So don’t assume that I don’t know the business and haven’t done my research.
Now, to your points:
So…because you don’t know the terms of the contract IPG and Amazon are disagreeing over (why should you?), you assume that publishers, writers, writers’ organisations, and book retailers are vilifying Amazon for no justifiable reason?
No, I don’t assume that. What I said and will repeat is that we don’t know the terms and this middleman (IPG is a distributor, not a publisher) is saying it would be so much better for authors and publishers and everyone is jumping on board WITHOUT ANY PROOF. Basically, what you are accusing me of doing–which I’m not. And that, sir, is something you’d know if you really read this post and my other posts on this issue. You would also know, if you read this post and others by me, that I don’t think Amazon is an angel. However, they are NOT the cause of all the problems facing the publishing industry these days.
Do a little research. . . .
Oh, my. A little hot under the collar, are we? First of all, I did do my research. Let me ask you this? Where were you when the big box stores came to town and started driving all the smaller, locally owned stores out of business? Where is the competition now for these large stores which, by the way, managed to drive the smaller stores under by doing exactly what you accuse Amazon of doing–of offering books for less.
Another question, if Amazon is such a threat (and yes, I do realize it is a threat because it has a huge selection, lower prices and–gasp–good customer service), then why didn’t these same stores that had driven the local stores out of business work their asses off to form a viable online presence for themselves? And why didn’t they work with publishers long ago to get better terms? Funny that no one stepped up to do this until Apple did with the agency pricing model 2 years ago. And guess what? The bull the readers were fed that this new pricing model would put more money into the pockets of the writers is just that–bull.
Everything publishers are doing right now is an effort to prevent Amazon from creating a monopoly. Are pubs protecting their own bottom line? Of course; they’re businesses, that’s what they do. They just happen to be protecting everyone else in the process.
No, they aren’t trying to keep Amazon from creating a monopoly. If they were, they’d also be going after B&N for its in-house publishing efforts. And where in the world do you get this idea that publishers are trying to protect everyone else in the process? As an author, I can guaran-damn-tee you that isn’t the case. If it were, the first thing they’d do is increase the royalty percentage we get from e-book sales. The second thing they’d do is lower e-book prices to a reasonable point that would increase sales across the board. No, the only entity publishers are protecting is themselves.
Besides, what does this have to do with IPG? As noted above, IPG is a distributor, something not needed to put e-books up on Amazon or BN or many other sites. They are, in fact, one more level of money out that doesn’t go in the authors’ pockets.
Full disclosure: I work at a bookstore. A real one, with walls and shelves and people who actually care about books. Right now, the selfish, backward publishers are all that’s standing between us and total destruction at Amazon’s hands.
Cool. I love bookstores. They are some of my favorite places to shop. However, I hate to break it to you but publishers aren’t all that’s standing between you and destruction at Amazon’s hands. No, things like carrying a wide selection of books, purchased with your particular customer base in mind help save you against the evil that is Amazon. Knowledgeable, courteous staff is another. Most people I know would prefer buying from a brick and mortar store, even they had to pay a bit more, if it was a bookstore and not just a store that sells some books after you navigate your way through the maze of toys, knick-knacks, etc.
I could go on but you went off on the chest beating, fist pumping tirade I was talking about. Amazon is the root of all evil and the faulty business plans, over-expansion after driving small, locally owned bookstores out of business and other factors that have led to the problems publishing now face simply don’t matter to you guys as long as you have Amazon to blame.
Once more I ask: why should Amazon continue selling e-books it no longer has the contractual right to sell? That, sir, was the original question and one you failed to address in your rant against the company. And, before you go off again, I remind you, I don’t trust Amazon any further than I can throw them. However, they have opened up avenues for writers we didn’t have before. They have given us a way to verify the numbers publishers have said we’ve been selling — and there are a number of authors now asking for accountings from their publishers because of the creative bookkeeping publishers have been doing for so long. So, step back, look at things from both sides and then cast your stones.
Andrew, I’ve been reporting on the ebook thing for years, and I was writing about it predicting a lot of this stuff before the first Kindle came out. Here are some facts for you:
(1) cost of a traditional book comes down like this: first, the book is discounted 50 percent or more to the bookseller; they get their margin out of that 50 percent. So we *know* the production cost of the book is less than that. In the mean time, the bookseller has to pay for millions of square feet of shelf space, utilities, people doing the shelving, and so forth. We know those costs are substantial, that’s part of why Borders is gone.
(2) based on the major publishers’ financial statements, it appears that of that 50 percent, about five of that percent goes to the writer — when the publisher eventually pays it after the Hollywood accountants get done with it. The publisher has to pay for printing the books and shipping them, which by far dominates their costs. — taking possibly 30 of that 50 percent.
(3) The remainder of their costs involve making up the type and loading up those high-volume presses. Press time is expensive, so they don’t like to do it for small runs. Thus they can’t afford to print a book unless they expect fairly big sales — say 5000 copies. But to get to that point, they need to
(4) design, copy-edit, and set the books. Here’s a clue. A good paperback cover for a midlist book pays the artist between $500 and $1000 . A good copy-edit of a whole book, and the time spent using modern tools to prepare it, is about the same. Total, usually about a grand. Add to that an amortized part of the overhead cost of picking a good book to publish; it’s hard to estimate, but considering what a junior editor, editorial assistant, or first reader gets paid, it ain’t damn much.
That means the cost of typesetting etc per item for 5000 copies is between 5 and 10 cents. Add to that the 35 to 70 cents a copy the author gets for an $8 paperback, and the total cost of the book — as opposed to shipping and selling the pulp brick on which it’s supplied — is less than a dollar for 5000 copies. The pulp brick costs about $2.40 each. And if the sales exceed that first 5000 run, the costs of preparing the book are already amortized; it costs effectively zero. But the pulp brick still costs $2.40 each, and then you have to pay the book seller.
What Amazon did to start was realize that with cheap shipping and centralized storage and packaging — what’s called, together, “fulfillment” — they could buy books with that 50 percent discount, sell them discounted, and still make a hefty profit, while making it easy for books to be advertised and for people to find them. This was a Good Thing For Authors.
Now, where does IDG come into that? Basically, they present books from smaller presses to bookstores. They’re amazon as middle man: they take their cut, but they pay for advertising to bulk bookbuyers. They get their cut out of the book stores’ side.
So let’s compare that to ebooks.
Of ALL those steps, something less than 12 percent, INCLUDING THE ROYALTY, is being paid to produce the book contents, and the marginal cost of making and delivering a copy of an ebook is literally one ten billionth yes that’s billion with a B, of that $2.40 for making and shipping the brick.
Also note that IDG has no place in that whole process; the real question here is why IDG should get a cut at all. Their ONLY contribution is in the distribution of the bricks. That’s why they’re called a “distributor.”
Here’s a piece I did on the “agency” model when it was first proposed: http://pjmedia.com/blog/kindle-ipad-macmillan-and-the-death-of-a-business-model/
Here’s what I said then:
SFWA is just playing Monte Python “I’m not dead yet!”
As a reader I don’t see how IPG or SFWA benefit me. I can see how IPG might HURT me.