Wednesday, September 17, 2014

Latest Authors United Letter Misfires

The group Authors United spearheaded by Douglas Preston intends to send (or has sent, depending on when you read this) a letter to the Amazon Board of Directors regarding the Amazon/Hachette dispute. Given the dispute has been going on for months, it seems unlikely any director is unaware of the situation, so what is the purpose of the letter? Perhaps the group is trying to put pressure on the directors in their other working capacities? It will be interesting to see what (if any) reaction this letter brings from the directors.

My concerns are not with writing a letter to the Directors, but with the content of the letter. If the drafters would stick to facts, they could make a more powerful argument. But they stray from facts into justification, and that negates the power of the facts.

Potent charges:

“About six months ago, to enhance its bargaining position, Amazon began sanctioning Hachette authors' books. These sanctions included refusing preorders, delaying shipping, reducing discounting, and using pop-up windows to cover authors' pages and redirect buyers to non-Hachette books.

These sanctions have driven down Hachette authors' sales at by at least 50 percent and in some cases as much as 90 percent. These sales drops are occurring across the board: in hardcovers, paperbacks, and e-books. Because of Amazon's immense market share and its proprietary Kindle platform, other retailers have not made up the difference. Several thousand Hachette authors have watched their readership decline, or, in the case of new authors, have seen their books sink out of sight without finding an adequate readership.”

Had the authors next provided specific data to back up their statements—for example, screen shots of pop-ups, a case study of a debut author whose debut was ruined, and perhaps made pre-dispute post-dispute comparisons—they could have cemented in their readers’ minds how Amazon was harming specific authors. Putting faces on the problem would invoke wider sympathy. Authors who have “sold more than a billion books” should know about proper characterization.

Where the wheels fall off their arguments

The wheels fall off their battering ram in their attempt to storm Amazon’s gates when they stray from facts and wander into attempts at wider justification. The collapse starts with the patently false conclusion of this sentence, “We'd like to emphasize that most of us are not Hachette authors, and our concern is founded on principle, rather than self-interest.”

These authors make their living (multiple millions of dollars a year for some of them) based on a traditional publishing model. Threats to that model, including Amazon’s tactics and marketplace power, are threats to their individual welfare. Amazon is negotiating with Hachette today, but soon it with be negotiating with the other four of the big five publishers. Those signing authors with contracts with the other big publishers want Amazon to back off now before their publisher suffers similar negotiating tactics.

“Efforts to impede or block the sale of books have a long and ugly history.” Reading this sentence, I conjured piles of burning books in the streets and school boards banning books because their content was “anti-religious,” or “smut” or “Devil-worshiping.” Is this what they would have us believe Amazon is doing? Where is their angst about independent bookstores refusing to carry books published by their competitor, Amazon? Perhaps I missed it or it’s coming soon. I’m not holding my breath. This dispute is more akin to Walmart deciding to not stock any P&G products, but carry those of Unilever instead, than banning the sale of toothpaste.

But these authors disagree, and state, “Amazon has every right to refuse to sell consumer goods in response to a pricing disagreement with a wholesaler. We all appreciate discounted razor blades and cheaper shoes. But books are not consumer goods. Books cannot be written more cheaply, nor can authors be outsourced to China. Books are not toasters or televisions. Each book is the unique, quirky creation of a lonely, intense, and often expensive struggle on the part of a single individual, a person whose living depends on his or her book finding readers. This is the process Amazon is obstructing.”

How wrong can they be?

Their analysis is wrong on several accounts: Books are indeed consumer goods—who do they think buys their books if not consumers? Books can and are written more cheaply than those accepted by major publishers. Most fiction authors (based on numbers of authors, not sales revenue) write on speculation. They put their heart, soul and countless hours into creating their manuscript. Many will give their work away or sell it for $0.99 just to have others read it. That each book is unique is immaterial.

No person has a right to demand society pay in order for the individual to follow his dream, nor to specify how that dream should be funded. “Publishers provide venture capital for ideas. They advance money to authors, giving them the time and freedom to write their books.” Is the implication here that, if Amazon is successful, publishers will no longer use advances as a selling tool to entice authors to sign with them?

They would have us believe that because of the additional risk caused by Amazon’s negotiating tactics, publishers cannot afford advances? In 2013 the big five publishers had record earnings (over $1 billion), according to Publishers Lunch with gross profit margins of almost 11% on sales of almost $9.3 billion. The letter’s authors need to document any decline in advances that has occurred after (and therefore perhaps because of) disputes with Amazon.

At best, it is too early to tell the effect this dispute will have on advances, and ignores the change in large publishers’ practices regarding advances for midlist authors—a topic too large to address here.

Amazon’s purported responsibilities to the current system

The letter goes on to ask, “What will Amazon replace this process with? How, in the Amazon model, will a young author get funding to pursue a promising idea? And what about the role of editors, copy editors, and other publishing staff who ensure that what ultimately ends up on the shelf is both worthy and accurate?”

The publishing arm of Amazon pays advances to some of its authors; but more to the point, why is it Amazon the retailer’s responsibility to devise a solution to a postulated problem of declining advances? And what does the role of editors, copy editors, etc. have to do with anything relating to Amazon’s tactics in negotiating with Hachette?

Amazon (the retailer) is a middleman, selling content—in this case books. If the quality is high (however consumers define quality), people will buy it. If they don’t like the product they don’t buy it unless they have to, and books are not (for most people) a required purchase. Consumers don’t much care how the product is made; they only care about the overall level of satisfaction the product provides.

Furthermore, if venture capital is so important to authors (especially nonfiction per the letter), are publishers the only source? Today crowdsourcing funds a variety of businesses and some authors are selling pieces of their future revenues. In times past, individual patrons sponsored artists; perhaps aspiring authors need to find angel investors for the 21st century. My point is that even if advances are important for authors, publishers, while the current source, are not the only source, and it is unlikely Amazon is the only cause of their demise, should that happen.

My advice to the authors of these letters intending to get public support for publishers in their disputes with Amazon: use your talents to paint rich pictures of how regular folks have been devastated by Amazon’s practices. Give us a debut author whose books gathered terrific advanced reviews, whose sales at Barnes and Noble and Independent Bookstores are gangbusters, but because they are not listed on Amazon, the publishers will consider the book a flop. Find a single parent author whose spouse died fighting in Iraq and who is the sole support for three small children. Imply Amazon has ruined this family’s lives, even if it’s not strictly true. Stick a petition on and get a hundred-thousand signatures. Have Michal Moore make a documentary. Then, maybe you can put some pressure on Amazon.

This letter? An embarrassing misfire.

~ Jim


  1. Thanks so much, Jim, for this thoughtful piece. The Amazon-Hatchette dispute is one that is hard to figure out, especially for writers like me who aren't published by a big company (yet...). What about the deal proposed about the royalty pool (50% contributed from Amazon, 50% by Hatchette)? Since I have a Kindle app on both my computer and my Android tablet, as well as Nook on the tablet, can't people find other ways to get Hatchette authors books? I'm still confused, but a little less after reading your piece.

    1. Deb, You ask two good questions. First, people can order ebooks from Barnes & Noble readable in the Nook app (which you can get for your computer as well as tablets). And any physical bookstore will be happy to special order a book if they don't have it in stock.

      Amazon's offer to develop a royalty pool is, to my mind, an attempt to drive space between Hachette and its authors. The cost to Amazon is very small (Hachette books provides a tiny percentage of their revenue and profits, whereas for Hachette, the same sales represent a much larger proportion of their sales. So, at little cost to itself, Amazon would eliminate its negative publicity and prevent sales going to B&N, Books-a-million and the Indies. Hachette gets to sell books and essentially receive no value from the sales.

      My financial analysis agrees with Hachette's -- it's a deal for Amazon and a bust for Hachette, so they should not (and did not) take the "offer."

      If you want some more background on my take of the Hachette/Amazon dispute, you can read a few of my earlier posts over the last few months.

      ~ Jim

  2. Good post, Jim. I hate that debut authors are being hurt. I'm truly surprised at the number of writers who backed Preston, especially those published by publishers other than Hatchette. I suppose those authors are sticking up for Hatchette to nip the problem before it moves on to their publishers. I'm in the column of those who don't bite the hand that feeds them. I'm also there because paying almost the same price for an ebook as for a paper book is ludicrous. Maybe another reason is I'm exclusive to Amazon and happy about it. It all comes down to self-interest, doesn't it?

    1. Polly -- and there is NOTHING WRONG with self-interest -- just don't try to pass it off as something else as I believe Authors United are doing. I am neither for nor against Amazon and find it interesting to try to understand the financials underpinning the disputes.

      I do feel badly for authors caught in the middle, but I also feel badly for people who bought a house near the top of the market and saw its value decline 30+%. In neither case can I fix the problem.

      Loved your pic from WPA, by the way. ~ Jim

  3. Good analogy, Jim. "This dispute is more akin to Walmart deciding to not stock any P&G products, but carry those of Unilever instead, than banning the sale of toothpaste." I read the Authors United letter and thought it was a poor effort for a group of supposedly top writers. It seemed to be aimed at garnering sympathy for the poor Hachette authors without providing any specifics. I see it as a simple business dispute that got more publicity than it should have. I'm with Amazon on the price of eBooks. I and many others don't buy at those ridiculously high prices anyway, so those authors aren't losing sales because of Amazon, but because of Hachette's pricing policies. Your post is well done as always.