This weekend, Amazon sent an email out to all of its authors, asking them to email the Hatchette CEO and complain about the price of Hatchette e-books. It accused Hatchette of collusion, and claimed that they would like our (us, the KDP authors') help bringing down this great and powerful foe. They used out-of-context quotes from Orwell, and tried to make Hatchette look like the Big Brother of the publishing industry. I wonder if instead, they actually threw this dark shadow over themselves.
Let's start with a quote from the great man himself. Orwell said: "Political language... is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind."
Was this email design to turn the whole issue into propaganda? I think yes.
Thus far, through the battle between these publishing greats, I have not taken a side, assuming (most likely correctly) that there was a lot more going on than met the eye, and that there was insufficient information to really make a wise choice. Because I'm an independent author, I do feel a certain affiliation towards Amazon; however, due to their large and ever-increasing size, I also feel a certain amount of hesitation. At what point do they have so much power and influence that they become Big Brother? They claim that they are trying to keep e-book prices low and "build a healthy reading culture." But is that really Amazon's job? I'm not convinced.
Aside from all of this, there are three primary reasons why I think this email crossed the line:
- Amazon is calling on its authors to do its dirty work for it. It has not been able to resolve this problem with Hatchette, so it is pushing us to try and pressure Hatchette. If anyone did this on an individual level, it would be considered bullying, harassment, or at very least, childish. This is extremely annoying.
- The second reason is actually kind of hilarious. In their call to Hatchette, they suggest we ask the company to: "Stop using your authors as leverage and accept one of Amazon's offers to take them out of the middle." Hahahaha. Isn't that exactly what Amazon is doing? They've suddenly put us in the middle (including all of us that were never involved to begin with!), and are using our goodwill and loyalty to pressure Hatchette into doing what they want.
- Finally, we live in a free market. If Hatchette wants to overcharge for their ebooks, so be it. I don't know what their agreements are, but I honestly don't care if Hatchette authors make more money or not. They signed their contracts - it's their issue. That's why I am an independent author - so I can make these decisions myself and suffer the consequences (or reap the rewards) myself. As far as I'm concerned, Amazon's job is to sell stuff and let other people sell stuff through them. If they're trying to control the cost of a particular good, isn't that price fixing? Possibly not. I'm not an economist. But at very least, it feels pretty sketchy.
Other people on the interwebs have noted that the email did not include an unsubscribe button, that Amazon seems to be pitting authors against each other, and that they are unfairly targeting Hatchette's authors, simply because they are unable to resolve their struggles with the publishing company. I hope this tactic doesn't work, or else I'll be slightly disappointed in the independent publishing community.
I also feel that I should mention that they want us to "copy them" on the email so they can feel good about themselves and track what everyone is doing, and that while they have given us the name of the Hatchette CEO, they are unwilling to give us a name on their side. What if I have things I want to say to Amazon? Instead, I have to address it to "The Amazon Book Team." Way to take responsibility, Book Team.
In conclusion, I only have one thing to say:
Please leave me out of this.
P.S. If you are interested in reading the letter, I am posting it here so you don't have to go to Amazon's site and give them lots of hits (when everyone does that it is good for their SEO [google it]):
Dear KDP Author,
Just ahead of World War II, there was a radical invention that shook the foundations of book publishing. It was the paperback book. This was a time when movie tickets cost 10 or 20 cents, and books cost $2.50. The new paperback cost 25 cents – it was ten times cheaper. Readers loved the paperback and millions of copies were sold in just the first year.
With it being so inexpensive and with so many more people able to afford to buy and read books, you would think the literary establishment of the day would have celebrated the invention of the paperback, yes? Nope. Instead, they dug in and circled the wagons. They believed low cost paperbacks would destroy literary culture and harm the industry (not to mention their own bank accounts). Many bookstores refused to stock them, and the early paperback publishers had to use unconventional methods of distribution – places like newsstands and drugstores. The famous author George Orwell came out publicly and said about the new paperback format, if “publishers had any sense, they would combine against them and suppress them.” Yes, George Orwell was suggesting collusion.
Well… history doesn’t repeat itself, but it does rhyme.
Fast forward to today, and it’s the e-book’s turn to be opposed by the literary establishment. Amazon and Hachette – a big US publisher and part of a $10 billion media conglomerate – are in the middle of a business dispute about e-books. We want lower e-book prices. Hachette does not. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market – e-books cannot be resold as used books. E-books can and should be less expensive.
Perhaps channeling Orwell’s decades old suggestion, Hachette has already been caught illegally colluding with its competitors to raise e-book prices. So far those parties have paid $166 million in penalties and restitution. Colluding with its competitors to raise prices wasn’t only illegal, it was also highly disrespectful to Hachette’s readers.
The fact is many established incumbents in the industry have taken the position that lower e-book prices will “devalue books” and hurt “Arts and Letters.” They’re wrong. Just as paperbacks did not destroy book culture despite being ten times cheaper, neither will e-books. On the contrary, paperbacks ended up rejuvenating the book industry and making it stronger. The same will happen with e-books.
Many inside the echo-chamber of the industry often draw the box too small. They think books only compete against books. But in reality, books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.
Moreover, e-books are highly price elastic. This means that when the price goes down, customers buy much more. We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that the lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. The pie is simply bigger.
But when a thing has been done a certain way for a long time, resisting change can be a reflexive instinct, and the powerful interests of the status quo are hard to move. It was never in George Orwell’s interest to suppress paperback books – he was wrong about that.
And despite what some would have you believe, authors are not united on this issue. When the Authors Guild recently wrote on this, they titled their post: “Amazon-Hachette Debate Yields Diverse Opinions Among Authors” (the comments to this post are worth a read). A petition started by another group of authors and aimed at Hachette, titled “Stop Fighting Low Prices and Fair Wages,” garnered over 7,600 signatures. And there are myriad articles and posts, by authors and readers alike, supporting us in our effort to keep prices low and build a healthy reading culture. Author David Gaughran’s recent interview is another piece worth reading.
We recognize that writers reasonably want to be left out of a dispute between large companies. Some have suggested that we “just talk.” We tried that. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle. We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Then we suggested that authors receive 100% of all sales of their titles until this dispute is resolved. Then we suggested that we would return to normal business operations if Amazon and Hachette’s normal share of revenue went to a literacy charity. But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though e-books represent 1% of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle.
We will never give up our fight for reasonable e-book prices. We know making books more affordable is good for book culture. We’d like your help. Please email Hachette and copy us.
Hachette CEO, Michael Pietsch: Michael.Pietsch@hbgusa.com
Copy us at: firstname.lastname@example.org
Please consider including these points:
- We have noted your illegal collusion. Please stop working so hard to overcharge for ebooks. They can and should be less expensive.
- Lowering e-book prices will help – not hurt – the reading culture, just like paperbacks did.
- Stop using your authors as leverage and accept one of Amazon’s offers to take them out of the middle.
- Especially if you’re an author yourself: Remind them that authors are not united on this issue.
Thanks for your support.
The Amazon Books Team