Saturday, 23 August 2014

The Big River Has a Little Axe to Grind: Making Sense of the Amazon / Hatchette Dust-Up by Lev Butts

I have always wondered about people who fight viciously over things in which they have absolutely no control or even stake in. I have seen families and towns torn apart by football rivalries (and while sports rivalries in the American South can be pretty intense, they apparently have nothing on the fanaticism of the United Kingdom sports fans: hell, you all even have your own Wikipedia page for your riots).

"What happened, officer? Terrorist attack?"
"No, sir. Manchester lost."
I have seen grown-ass adults brought to blows at pop culture conventions over everything from the ending of Battlestar Galactica to whether or not Batman can beat Superman in a fight. As the kid of a cop, I have heard all too often of normally kind, loving people spilling each others' blood over which political party has the most assholes (off-hand, I'd say they're about even).

In my naivete, I have always held myself and people of like mind above such frays. None of us would ever stoop to that kind of insanity. Sure, we may disagree, us writers and scholars, but we have the solid foundations of reason and critical thinking to keep things in perspective. We can rise above petty bickering, see both sides of any issue, and argue reasonably and calmly about....

Shut up. 
OK, sure. We all have our hot button issues, but in my defense, I don't really hate John Green. As I've said before, I'm sure he's a great writer. My kid seems to think so. He also does a helluva lot to promote literacy for kids and adolescents, and that's always to the good. I do take exception to his views on independent publishing, but at least that is something I have a stake in. 

Recently, I discovered the one an issue that has brought many of my fellow writers to levels of vitriol that rival that of the worst soccer fan or sci-fi fanboy. 

Epic
 I am referring, of course, to the ongoing dispute between Amazon.com and Hachette Book Group. Apparently, all through spring and summer, the two companies have been involved in pricing negotiations for e-books. This is the fallout from a class action lawsuit a few years ago in which publishers had made illegal deals with Apple to raise e-book prices. So now, according to the very in-depth research I have been able to do in the last twenty minutes, in accordance with the judgment, Amazon is involved in pricing negotiations with Hachette (as well as the Bonnier Group, a Swedish publishing conglomerate), the first of the five major U. S. publishers involved in the lawsuit having to do so.

"What happened, officer? Sports riot?"
"No, sir. Someone told a Hachette employee that e-books should be cheaper."
In short, Amazon wants cheaper e-book prices ($9.99 or less), and Hachette claims that such low prices cannot pay the costs of producing the book. 

Riveting stuff, I know, but here's where it gets weird.

Amazon, in a move worthy of Vito Corleone, decided to hold Hachette's books hostage.

"Make'em an offer they can't refuse.
You know, cut off the book covers
and put them in the bed while they sleep."
They have refused to add pre-order buttons to upcoming Hachette books, slowed the delivery of others, referred customers to other, non-Hachette books, and decided against discounting Hachette books (an admittedly odd choice given that their desire is to ultimately discount Hachette books, kind of like suspending a kid from school from truancy).

We'll fix they're asses. If they won't come, we won't let 'em!
So far, so good, though. Sounds like aggressive negotiation tactics, but nobody's really hurt. 

Except for, you know, the authors of the books Amazon has targeted. In early August, a group of 900 authors signed an open letter published in a two-page ad in the New York Times decrying Amazon's tactics. Amazon responded a few days later by posting its own open letter implying that Hachette orchestrated the authors' letter and accusing them of using their authors as "human shields." 

And then the rhetoric gets really surreal, with one critic even comparing (with a straight face, mind you) Amazon's tactics to "Vladimir Putin mobilizing his troops along the Ukrainian border."

I vill drop prices if I haff to kill every author Hachette prints.
As a more direct response to the Hachette letter, a group of writers and readers posted their own open letter/petition supporting Amazon on change.org. I urge you all to read all three letters. They all make valid points and do an excellent job of boiling this very complex issue down to its bare essentials.

Did somevun say bear?
The gist is this: Lines have been drawn. Not surprisingly, they have been drawn between traditionally published writers (who predominantly support Hachette) and independently published writers (weighing in for Amazon). Yes there is some overlap, but this is the most prevalent breakdown.

And both sides have shown a tendency to behave towards each other with all the grace and charm of a Klansman discussing genetics. I have even heard of writers (traditional and indie) who have been threatened by their opposition for having the unmitigated gall to disagree. 

Threatened. By other writers. For having other ideas. 

We may all cry tears of irony.
So here's where I decide to step in and add my two-cents-worth:

Everybody is right.

Amazon is right: Traditional publishing is afraid of new technology. The whole dispute reeks of the paperback dispute in the 1940's: 
With [paperbacks] 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.
Yep, that's Amazon playing the Orwell card (literature's own version of Godwin's law), but ham-fisted rhetoric aside, they are correct: e-books are simply the paperbacks of today, and their struggle for legitimacy is exactly the same.

However, the 900 authors are also right: Amazon has indeed
directly targeted Hachette's authors in an effort to force their publisher to agree to its terms [by]
  • Boycotting Hachette authors, by refusing to accept pre-orders on Hachette authors' books and eBooks, claiming they are "unavailable." 
  • Refusing to discount the prices of many of Hachette authors' books.
  • Slowing the delivery of thousands of Hachette authors' books to Amazon customers, indicating that delivery will take as long as several weeks on most titles.
  • Suggesting on some Hachette authors' pages that readers might prefer a book from a non-Hachette author instead.
Given that Amazon instigated these tactics to hurt Hachette through its authors, accusing the publisher of using its writers as "human shields" seems a bit disingenuous. Sort of like shooting a rival's kids and then accusing the rival of using the children as shields because they happened to be standing behind them at the time.

And the change.org petition is also right on several counts:
  • You may remember a story from a few years back about the five major publishers breaking the law and colluding to raise the prices you pay for your e-books. These publishers were ordered by the Department of Justice to pay millions in a settlement. Their intent was to price digital books high, stifle innovation, and limit your freedom to read as you see fit. The pressure for this change came from bookstores, from major publishers, and from other online retailers. [...] Fortunately, prosecutors rescued us from this price-fixing scheme, and digital books went back to a reasonable price. 
  •  You may have heard that Amazon is making books unavailable. This simply isn’t true. Amazon has turned off pre-order buttons for Hachette’s books, as negotiations have broken down to the point that Amazon may not be able to fulfill those orders once the books in question are released. The books that are supposedly being made unavailable aren’t available for sale anywhere else because they aren’t out yet. 
  • Amazon pays writers nearly six times what publishers pay us. Amazon allows us to retain ownership of our works. Amazon provides us the freedom to express ourselves in more creative ways, adding to the diversity of literature. Unlike the New York “Big Five,” Amazon allows every writer access to their platform. 
  • Negotiations between publishers and retailers happen all the time. Recently, Simon & Schuster found itself in a similar deadlock with Barnes & Noble. Many authors were affected, but not by missing pre-order buttons or delayed shipments; their books simply weren’t carried at all. They were shut out completely.
This last point is particularly apt as it underscores, not only that these kinds of tactics are not unique to Amazon, but that they are fairly common and often far worse than Amazon's actions. (Yes, I know that a murderer can't be excused because someone else is a cannibal, but the petition's point is still valid).

Dammit, foiled again.
However, Amazon and Hachette are both wrong:

Hatchette is wrong to demand such prohibitively high prices for e-books. They cost next to nothing to produce (other than design and layout) since there is no physical material needed: no paper, no glue, no ink, etc. Unfortunately, most e-books cost as much if not more than the paperback of the same title. Hell, even Amazon's proposed $9.99 is too much to pay for a book that costs nothing to produce and that you don't really own anyway.

To which I will add, just as paperbacks ultimately prevailed without destroying hardbacks, it is fairly unlikely that e-books are going to destroy hardcopy books (of whatever back). In fact, cheaper e-books may possibly increase sales of hardcopy editions. I buy hardbacks even if I own the paperback if I really like the book. And if e-books were cheaper, I'd buy them so I could continue reading my books away from home without lugging them with me (I tend to read two to four books at a time).

However, Amazon is wrong to punish the authors for having the misfortune of being published by Hachette. While the author of the change.org petition presents a very good explanation for Amazon's "failure" to offer timely shipping of Hachette's books, there are problems with it. The petition claims that Amazon is not stocking Hatchette books in case negotiations completely break down and they are no longer able to sell them. They do not want to have an unsellable overstock of books, so current Hatchette orders have to be filled by the publisher, not Amazon, a process that often takes weeks. My admittedly limited understanding of book selling, though, is that the books are bought from the publisher before hitting the shelves (virtual or otherwise). If negotiations break down, those books are still owned by Amazon and can be sold even if they do not purchase future Hachette books.

The petition cannot explain away Amazon's refusal to discount Hatchette books other than to state the obvious: Amazon is under no obligation to discount any book, and the high price is the one set by the publisher.

As for suggesting buyers purchase non-Hatchette books instead, that's kind of a prick move. That is, undeniably, an attempt to hurt Hatchette by hurting its authors, and that's wrong.

The long and short of it is publishers have set absurdly high prices for e-books, and I support Amazon's desire to bring those prices down, but not by punishing the authors.

Honestly, though, we are all armchair-refereeing a fight between two businesses who are both trying to paint themselves as the aggrieved party in a dispute that ultimately boils down to one company wanting to make itself more money and another wanting to save itself more money.

At the end of the day, neither of them really cares whether I save money, despite their rhetoric. At the end of the same day, if there's an e-book I want badly enough, I'm probably going to buy it regardless of the price, though I may complain about it like a fanboy critiquing the new Star Trek film while in line for his third ticket.

It sucks worse each time I see it. 

And both parties know this.

6 comments:

Lee said...

I'm not very well informed about the dispute, but this certainly seems to be a fairly comprehensive overview of the situation and consequently very useful. However, I'm skeptical about a simplification like 'Traditional publishing is afraid of new technology.' Traditional publishers may have been slow - at least in significant instances - to adopt new technology, but this is hardly the case any longer. Fear of losing market share, of revenue and influence, is not identical to fear of technological development.

Dennis Hamley said...

If it wasn't so serious, it would be quite diverting to watch a life or death struggle in which both parties are wrong.

CallyPhillips said...

Fascinating Lev! I'm happy (?) to say that as a Scot I've been so engrossed (not embroiled) in our own wee stooshie about Independence at the moment that the whole Amazon/Hatchette thing has passed me by. I'm guessing it'll all get resolved without my intervention - I know I'm powerless there as a writer/reader and publisher! All I know is that I have my own bookstore, selling ebooks and paperbacks and whatever discounts I make available people still seem to prefer to buy from Amazon (who take 65% from me) and/or bitch about the fact they can't buy from a 'real'bookstore which will take 40% from me. I can offer them the same goods cheaper to them without the 'corporate' middleman but when it comes to brass tacks, they all want to buy from these places rather than support the 'independent'. It's like Bolivia 1967 all over again. You can't 'force' revolution on people who won't wake up to the possibilities but instead, when you give them weapone, turn round in fear and start shooting at you as they retreat! Guerrillas... duck now!

Catherine Czerkawska said...

I've been following this dispute from the start - and in fact I signed the bigger petition initiated by Howey and Konrath. But isn't it crazy that Hachette is complaining because Amazon wants to sell the books at - horrors - the prices set by Hachette? I was going to say I can't remember when I last read a piece of fiction in hardback but I can and I hated it: a big, hard, spiky inconvenience was what I thought. And although you may pay a high price for an eBook, I won't. The reality is that I simply don't have the cash to splash on something I see as an overpriced rip-off. I suspect there are lots of people like me. They are the people I see in charity shops and at car boot sales, buying heaps of second hand but almost new books by their favourite authors. Amazon knows this because they are a tech company. That have the data. I was on Amazon last night, looking for a traditionally published book written by a colleague - one I want to read. It's currently available as an expensive hardback and an expensive eBook. Did I bite the bullet and buy it? No. I downloaded another reasonably priced eBook instead - another book I very much wanted to read. That's the problem for them. There is always another book you want to read. If bookselling involved straightforward buying and reselling there would be no problem. That's what Amazon would like. Because you generally buy something at trade prices, routinely around 50% of the retail price and then you can resell it at any price you damn well please. Your mark-up is up to you. It is, essentially, none of your supplier's business. That's how most businesses work. Bookselling to traditional stores is a form of (disastrous for most authors) sale or return and in addition to that, the publishers want the traditional agency model with Amazon where they dictate a price and a percentage - which means that Amazon may be losing money by discounting to a sustainable price. Ironically, this is pretty much the KDP model too where we price and they keep their percentage, but indies don't publish at crazy prices! Amazon has offered on three separate occasions to compensate authors for lost sales, but Hachette turned up their noses at all offers without asking their poor mid-listers - as opposed to the handful of multi millionaire brands at the top of the tree - what they thought about it. I agree that this is two giants slogging it out in public and they shouldn't be doing it this way. But the other interesting thing for me is that nobody apart from a handful of people with monkeys in this circus actually cares. I asked a big group of readers what they thought about it a couple of weeks ago. Not only had they not heard about it, but they didn't know who Hachette were. Had never heard of them. Readers almost never know or care who publishes a book. Which I find kind of reassuring!

Lydia Bennet said...

nice clear overview of the whole sorry mess! very helpful. I've writer friends who are very strongly for and against each of the battling sides, but in the end readers will do better with cheaper books and those who like hard copy will keep buying dead tree books. Some readers are willing to pay very high prices for the ebook (sometimes more than the paperback!) of someone famous or well up the best seller list, others will only go for free books, and the market has room for all. I must admit I don't like being charged a lot for a book which has cost naff all to produce, as the cover, editing etc has already been done for the hard copy. It has always looked to me as if some big publishers are trying to discourage people from buying the ebook versions.

Kathleen Jones said...

A very clear analysis Lev. I refuse to buy an e-book that's more expensive than the paperback - that is sheer greed. What are they thinking of?