Archive for the ‘Hachazon War’ Category

Amazon offers Hachette authors 100% royalty

July 10, 2014

Amazon offers Hachette authors 100% royalty

I’ve previously said this:

“Hachette (a publisher) and Amazon (a retailer) are in the midst of a turbulent negotiation. It’s like Godzilla battling Mothra…and unfortunately, in that scenario,we readers are Tokyo.”

Well, there is another group that might be considered collateral damage…authors.

Those aren’t the only ones affected, but let’s focus on that for a minute.

Essentially, fewer Hachette books are probably being sold right now, because they are not as available through Amazon.

Authors traditionally get paid a percentage (called a “royalty”) when a book sells.

It could be a percentage of the purchase price, or a percentage of the list price of the book.

How much of a percentage?

That varies.

In p-books (paperbooks), a brand name author (Stephen King, Anne Rice) might get 25%, more authors might get 10 to 12%, and it can go down from there.

For e-books, the royalty tends to be higher. Independent authors who go through Amazon get 35% or 70%…the latter if they follow certain guidelines, including the price of the book and participating in Amazon’s special features (like text-to-speech).

In my last post on this:

Hachazon War: the Battle of Petition Hill

I wrote about some authors condemning Amazon, and some supporting them.

Well, according to this

New York Times article by David Streitfeld

Amazon is offering authors a higher royalty while this dispute continues.

Are they going to give these traditionally published authors the same royalty as the indies…35%?

Nope, higher.

70%?

Nope, higher.

Try 100%.

O N E  H U N D R E D !

That’s right…Amazon is offering to give the authors every single penny the retailer gets when it sells one of their e-books (published by Hachette).

What’s that dull thumping sound I hear?

Oh, it’s Amazon investors…fainting. 😉

There are costs of sale for Amazon, so they would clearly be losing money on each of those e-books. They have to pay something for maintaining the infrastructure, the administrative cost of collecting sales tax (where they do that), other accounting, providing Customer Service, and so on.

This is getting heated, and public.

This

Mashable post by Jason Abbruzzese

has Hachette’s response to the offer (it’s not favorable).

Amazon’s response to that?

I quote in part:

“We call baloney.”

The company that sells

close to a thousand thesauruses (at AmazonSmile: benefit a non-profit of your choice by shopping*)

went with a schoolyard epithet. 😉

What do authors think about the offer?

In that same article,

Douglas Preston (at AmazonSmile)

is quoted as saying,

“To take that money would really violate my moral and ethical principle.”

Preston mentions wanting to pay back advances before the author would take any of the millions of dollars this might mean.

Let me explain that part.

One of the big arguments for tradpubs (traditional publishers) is that they pay authors advances.

What that means is that, if they are reasonably sure your book will sell (because you have a solid track record, or are perhaps a celebrity, or they like your topic), they will pay you the royalties first…often before the book is even done being written.

That’s an “advance” on the royalties.

That’s often what enables an author to complete a book.

Let’s say you are a brand name author…you are likely to earn millions in royalties from next book (and the publisher is going to make many times that).

They could give you $100,000 for you to live on for a year to write the book…but you would have to pay them back out of the first sales of the book.

My understanding is that authors are almost never asked to give back an advance even if a book doesn’t sell…but that has happened.

When you publish a book yourself, you don’t get an advance from a publisher.

One new technique is crowdfunding, though.

People pay indie authors in advance for a book…they buy it before it is published.

In exchange, they often get something extra: e-mails from the author, or maybe a special additional short story. There might be a “meet the author” party.

Those early buyers may even pay considerably more than the general public eventually will.

That’s one of the threats to tradpubs.

One thing about which I’m not quite clear.

It sounds like Amazon is proposing that Hachette also give up their part of the book sale in some of the articles I’ve seen…in others, it makes it sound like it is Amazon unilaterally giving up their part.

Obviously, that makes a difference. 🙂

If the book is list priced at $10, we’ll say that Hachette would get $7 of it.

Amazon sells it for $8.

Amazon sends that $8 to the author (under the new proposal).

Do they also send $7 to Hachette?

If they don’t, clearly, Hachette would have to agree…and this letter would put the ball in Hachette’s court.

If they do send the money to Hachette, Amazon directly loses $15 instead of making $1.

Yep…an expensive proposal.

I think there is a lot at stake here.

This could change the landscape.

It might drive authors to do much more independent publishing.

It could cost Amazon a lot of goodwill with the public (although not, apparently, with my readers, based on a poll I did not too long ago).

It could cost Hachette marketshare.

However, on that last point, it’s worth noting that Amazon is going to have to negotiate with the others of the Big 5 publishers. Right now, I’m guessing they may be trying to wait to see what happens with this one. Contracts expire at some point, regardless, so it’s going to happen.

I do find this all quite interesting…but I am looking forward to writing about something else tomorrow! 🙂

What do you think? How will this change the literary landscape…or is it just a bump in the road? Feel free to tell me and my readers what you think by commenting on this post.

Join hundreds of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Hachazon War: the Battle of Petition Hill

July 4, 2014

Hachazon War: the Battle of Petition Hill

Amazon and the publisher Hachette have had a very public dispute over terms, which I refer to as the “Hachazon War”.

Rather than calming down, I’d say that the coverage, at least, has been escalating.

In a recent

Wall Street Journal article by Jeffrey Trachtenberg (who I think is the best mainstream reporter covering these issues)

Russ Grandinetti, Amazon’s top Kindle content person, said that this is in the best long-term interest of Amazon customers, even if it hurts Amazon’s reputation in the short run.

That reputation is important.

Amazon’s ability to launch something like their new

Amazon Fire Phone (at AmazonSmile: benefit a non-profit of your choice by shopping*)

(which I have ordered) depends, in my opinion, in large part on the average consumer (not the super techie) being comfortable with Amazon…feeling safe with them.

They may not be reading the details of this dispute, but like an argument overheard through the thin walls of an apartment complex, they can get the gist of it. 😉

Not surprisingly, one battlefield in this conflict is the internet.

Douglas Preston (at AmazonSmile)

a very successful author, has started an open letter to readers, explaining one view of the situation, and asking those readers to e-mail Amazon’s CEO (Chief Executive Officer), Jeff Bezos, at

jeff@amazon.com

to express their opinions.

It’s an interesting letter, pointing out how authors supported Amazon, and helped it become what it is today.

The part that many casual observers will hear is the list of authors who have signed the letter (and that is growing).

Even someone who just reads a few books in a year has heard of Stephen King. If all they hear is that Stephen King signed a letter “against Amazon”, it will influence many of them to have a lower opinion of Amazon…it’s sort of like name recognition getting incumbent politicians elected.

It’s an astonishing list of names, including at least one who has been published by Amazon’s own traditional publishing imprints. Here are just a few of the long list:

  • David Baldacci
  • Greg Bear
  • Philip Caputo
  • Robert A. Caro
  • Susan Cheever
  • Clive Cussler
  • John Grisham
  • Barbara Kingsolver
  • Donna Tartt
  • Jane Yolen

That letter has gotten a lot of coverage.

On the other side is this online petition

To Thank Our Readers (on Change.org)

It’s description is much longer than the Preston letter, and it is largely independent writers supporting Amazon (with a particular focus on this dispute).

The petition suggests that this is a fight between the tradpubs (traditional publishers) who have, in the past, controlled publishing, and Amazon, which disrupted that model and enables indie (independent) authors to make a living when they wouldn’nt have been able to do so through tradpubs.

As disclosure, I am an author who benefited through the use of Amazon’s indie publishing platform (now called Kindle Direct Publishing). None of my titles would have been published by one of the Big Five (used to be Big Six) publishers.

However, I don’t think that makes me prejudiced in favor of Amazon. In fact, my sense was that many of my readers were surprised when I first wrote about the Hachazon War, and I indicated that I didn’t like some of the things Amazon was doing.

I would guess that both sides are contributing to the conflict. Conflicts are surprisingly weak organisms: if you don’t constantly feed them, they tend to die pretty quickly. 😉

We now have heard a bit more about what the disagreement.

Grandinetti flat our said it was about e-book pricing (even though p-books…paperbooks…are casualties).

I’ve heard that Amazon may want a bigger cut: 50% rather than 30%, but I don’t know that that is true.

If it was, what would it mean for readers?

Let’s say that a publisher prices an e-book at $10, and Amazon pays them 70% for it. The publisher gets $7, and Amazon gets $3. That’s not all profit, of course…there are costs of sale and of production. Amazon is also likely to discount it, but let’s leave that for now.

Now, let’s say that the split changes to Amazon paying them 50% instead of 70%.

Let’s further say that the publisher’s model is based on getting $7 for that book.

For the publisher to get $7, they have to raise the digital list price to $14.

That is the price you might pay at other retailers.

What does Amazon have to charge the customer to get the same $3 they were getting?

The same $10 they were charging before!

A bigger cut for Amazon means that they can discount more…and at a rate that other retailers might have a hard time matching. As I’ve written before, Amazon doesn’t need to make money on e-book sales (although they’d like to do that)…if the e-book sales inspire other more profitable sales, Amazon does fine.

The way I’ve laid it out above, the readers would pay the same for the book at Amazon, but likely more for it at other places.

This dispute may also encourage more authors to publish independently…like

Hugh Howey (at AmazonSmile)

and other authors who are mentioned on the Change.org petition.

Indie publishing right now is likely to include Amazon, which also benefits the e-tailer.

It’s possible that indies may eventually be able to dispense with retailers at all (selling directly to readers), but we aren’t there yet for most people.

I generally see both sides to an issue, and that is the case here…but I’ll stay with my not liking some of Amazon’s tactics.

What about you? What’s your opinion?

Have more to say to me and my readers about this? Feel free to do so by commenting on this post.

Join hundreds of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Round up #257: things like us, Colbert & King

June 6, 2014

Round up #257: things like us, Colbert & King

The ILMK Round ups are short pieces which may or may not be expanded later.

For my UK readers: KFHDX 20% off

Amazon.co.uk is having a Kindle Fire HDX sale through 12 June:

Kindle Fire HDX (from Amazon.co.uk)

You can get the 7″ (gee, do you call it a 17.78 centimeter?) from £159.20, a savings of about £40.

The 8.9″ is from £263.20 (a savings of about £66).

You can also get the first generation (so, not the current one) Kindle Fire HD 7″ for £99! That’s a savings of £60.

We aren’t having an equivalent sale in the USA, but I thought my UK readers might appreciate the alert. 🙂

It’s ba-ack! The Kindle DX available again new from Amazon

Thanks to Andrys Basten of the

A Kindle World blog

for the heads up on this…and it would have been tough to find!

The larger (9.7″) non-Fire Kindle is back on sale new from Amazon…and for a good price of $199.

Kindle DX

You are definitely dealing with older technology here, but it a large screen non-backlit device with text-to-speech (although an older and less sophisticated version than we have on the Kindle Fire HDX) and a physical keyboard.

Maybe I should find somebody with a different first name…

You know how, for some people, e-books made books a whole lot cooler?

Well, we know that book issues are part of the mainstream…because celebrities are commenting on the Hachazon War (that’s what I call the disagreement going on between Amazon and Hachette, a publisher).

First, let’s mention Stephen Colbert, who did a pretty lengthy (3 minutes and twenty seconds) segment on the Hachazon war:

Comedy Central video clip

Colbert’s books have been affected by Amazon’s “tactics of mass inconvenience”, causing delays in getting the faux pundit’s books.

The weird thing is that you can get Kindle editions of the books right away…but they appear to only be the enhanced versions (meaning they’ll audio/video content). The two in particular that I’m seeing have text-to-speech access blocked, so I’m not going to link to them…but they say they are only available on these devices:

Kindle Fire HDX 8.9″
Kindle Fire HDX
Kindle Fire HD(2nd Generation)
Kindle Fire HD(1st Generation)
Kindle Fire(2nd Generation)
Kindle Fire(1st Generation)
Kindle for Windows 8
Kindle Cloud Reader
Kindle for Android Phones
Kindle for Android Tablets
Kindle for iPad

Since they list no non-Fire hardware Kindles, it makes me think these are only available as enhanced versions…and it is possible that that is a different deal with Hachette.

If you want the hardback new from Amazon, you have to wait: “Usually ships within 3 to 5 weeks.”

However, here is something else interesting. On the product page, you can get a used copy from Amazon for $9.50…and they’ll ship it with Prime!

Used books usually don’t go Prime (where you pay nothing additional for two-day shipping beyond your annual Prime fee).

That’s a fascinating approach on Amazon’s part!

The publisher, of course, doesn’t get an additional cut for a used book…and the author gets no royalty.

Amazon has found a way to get you the book (albeit, a used copy) just as quickly as if you bought it new…and pay Hachette nothing when you do it.

Colbert was funny, and put a lot of effort into this, I’d say. I did like this line (which I’ve edited slightly from the live delivery):

“This is a big blow to my bottom line because Amazon controls around fifty percent of all book sales. That’s right: thirty books a year.”

Colbert also has a printable sticker you can put on a book that says, “I Didn’t Buy It On Amazon.” You can get it at the site above.

That reminded me of the statement that Psychotronic Video used to put on the cover: “Still not a part of AOL Time/Warner”.

This segment clearly presents the authors as victims. The piece doesn’t make Hachette blameless, but mostly mentions Amazon.

I did think it was nice that they arranged a deal with Powell’s Books (one of the great bookstores) so you can order the book through the Comedy Central website above.

Sherman Alexie recommended boycotting Amazon until this was over.

The other famous Stephen who recently commented on the Hachazon War is Stephen King.

I was reading (as I do every week)

Entertainment Weekly (at AmazonSmile)

(specifically, the June 13, 2014 issue), and the cover had a link (I’m reading it on my

Kindle Fire HDX (at AmazonSmile: support a non-profit of your choice by shopping*) )

to a commentary by the prolific author called, “Stephen King Sounds Off on Amazon” (which is actually a sidebar on a longer article by Karen Valby about the Hachazon War).

I’m not seeing it as available on the EW website, but I’ll give you a small excerpt:

“In a sense, it’s like a hoodlum in the protection racket strong-arming one small-business owner so that all the other owners on the street — we could call it Book Street — will fall into line.”

While I have found some statements aligning with Amazon, I’d be happy to find one by somebody who has a voice outside of books and the publishing/bookstore world. Stephen King is an author, of course, but is known to people who…gee, how do I put this…don’t read.

Amazon has recovered from other public relations issues in the past (such as the removal of an unauthorized George Orwell book from people’s Kindles…although I just saw someone raise that on the Kindle forum again, without mentioning what I thought was a good resolution and apology), and if the gadget which is announced in about a week and a half is buzzy enough, it may turn the narrative.

Barnes & Noble partners with Samsung for future tablets

NOOK tablets did not go well for Barnes & Noble. People doubted that Amazon could do hardware at all before the Kindle…after all, it wasn’t their area of expertise. However, they did do it quite successfully.

For B&N, it makes sense to turn over tablet manufacturing to an experienced partner (resulting in a co-branded device)…and Samsung is a good choice for that.

PC Mag post by Angela Moscaritolo

In fact, my intuition here is that Samsung may greatly improve the NOOK tablet reading experience…which might drive improvements in Kindle tablets as well.

Why does Samsung want to do it?

Why not? 🙂

They get to be seen as saving Barnes & Noble’s NOOK, and people appreciate that. They don’t have to invest a lot of money…it sounds to me like they’ll basically take existing hardware and add NOOK software to it. Of course, you can already get NOOK software on a Samsung tablet…but they will brand it that way.

While B&N hypothetically gives up the income stream from NOOK tablets, it hadn’t really been working out as a plus…

Kiva robots going to work at Amazon

Robots to the left of me
Robots to the right of me
Into the Amazon warehouse rolled the ten thousand…

Thanks to the reader who alerted me in a private e-mail to this

EXTREMETECH article by David Cardinal

I write about robots (and lots of other things) in my

The Measured Circle blog

and “flip” lots of articles about them into the free

The Measured Circle magazine at Flipboard

Well, this brings together Amazon and robots.

Amazon spent a lot of money (about $775 million) for a robot company, as I wrote about back in 2012:

I, Amazon: the e-tailer buys a robot company

The article has a great video of the Kivas at work, but also points out some important things.

Sure, people worry about humans losing jobs to robots…and that undeniably happens. The thing is, though, that people also gain jobs because robots are working…and they may be jobs which are better suited (and feel better) for humans.

Robots aren’t cheap, but there are some huge savings involved with them. You often hear people say that they don’t get sick, although they do need maintenance. They don’t need some kinds of leave, though…and they don’t need raises.

Perhaps not as obviously, the Kiva robots can cut down on utility bills. They probably don’t need lights, for example, and from what I’ve read, you don’t have the same air conditioning issues (which has been one of the major complaints for humans working in Amazon warehouses…they can get hot!). They aren’t like mainframe computers, which often need quite a bit of climate control.

Isn’t that a weird thought?

Tourist: “Hi, I’m here for the Amazon warehouse tour.”

Tour Guide: “Great! You’ll need these night-vision goggles, and this personal-cooling suit.”

Tourist: “My what and my who?”

Tour Guide: “This warehouse has been optimized for our silicon-based workers. What do you see through this window?”

Tourist: “That’s a window? I thought it was a TV that was off.”

Tour Guide: “No, that’s the interior of the fulfillment center. It’s just that dark.”

Tourist: “Can’t you turn the lights on?”

Tour Guide: “There aren’t any lights.”

Tourist: “Um, okay. Why the suit?”

Tour Guide: “Well, the suit isn’t strictly necessary, but it is about 40 degrees in there.”

Tourist: “Wait, didn’t you say it was a cooling suit?”

Tour Guide: “Oh, sorry…forty degrees  Celsius. It’s about…104 degrees Fahrenheit.”

Tourist: “Why so hot?”

Tour Guide: “That’s just because of the temperature outside…we don’t heat the floor.”

Tourist: “I’m from Phoenix, I won’t need the suit. How long does the tour take?”

Tour Guide: “About seven to nine minutes.”

Tourist: “That’s it? Don’t we get to see the whole place?”

Tour Guide: “That is the whole place…well, all of it where a giant biped like you will fit. The rest of it is all Kiva height.”

Tourist: “You know, I think I’ll skip it.”

Tour Guide: “Suit yourself. The next shuttle for downtown is in two hours.”

Tourist: “Two hours? I knew I should have driven!”

Tour Guide: “You can’t…there’s no parking lot.”

Tourist: “No parking lot?”

Tour Guide: “No need for one. Do you know how much land like that costs? Not to mention the expense for damages, the danger to people walking to and from…this is much simpler.”

Tourist: “What about you? Where do you park?”

Tour Guide: “Oh, I don’t park. I just live here. I’ve got everything I need…and AmazonFresh brings me my groceries. It’s actually cool. I’m the only human most of these Kivas have ever seen.”

Tourist: “I wonder if they think all human beings look like you…”

Tour Guide: “I doubt that’s the case.”

Tourist: “Yes, that’s silly. Robots don’t think.”

Tour Guide: “They think…they definitely think. They just don’t think about things which are insignificant to them…”

Speaking of thinking, what do you think? Will Samsung keep the NOOK brand for tablets alive? Will B&N farm out the non-tablets to somebody else? Will Amazon ever run out of Kindle DXs…or replace them with another big screen non-backlit device? Feel free to tell me and my readers what you think by commenting on this post.

New! Join hundreds of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

What happens if Amazon and Hachette can’t agree?

May 30, 2014

What happens if Amazon and Hachette can’t agree?

It isn’t personal.

Hachette (a publisher) and Amazon (a retailer) are in the midst of a turbulent negotiation. It’s like Godzilla battling Mothra…and unfortunately, in that scenario,we readers are Tokyo.

Businesses famously fight and fight and fight and then settle things up and go back to business as usual. It’s not personal…there is nothing that fundamentally stops them from making money together.

Except sometimes, they don’t.

What if this is one of those times?

What if Hachette, which may be trying to bring back the Agency Model in September (when their legal prohibition ends), and Amazon, which wants control over consumer pricing, just finally have to stop working with each other?

A little over three years ago, I wrote

A Tale of Two Middles

I looked at the two “middles” between authors and readers: publishers and retailers. I even specifically compared Hachette and Amazon:

“How many people know Amazon versus knowing Hachette?  Familiarity is important online…you’ve got to trust the people from whom you buy.  Amazon has been cust0mer-facing for more than a decade…publishers are just really learning that.”

In the past three years have we gotten to the point where the tradpubs (traditional publishers) and Amazon don’t need each other?

Let’s postulate that Amazon and Hachette can’t work it out…and Amazon stops carrying Hachette books.

What would happen for Hachette?

Hachette would need to find another way to sell those books: Amazon is clearly a huge hunk of sales. They could, of course, hypothetically reconfigure in a way that they need to sell fewer books…take fewer risks in publishing choices, come up with alternate funding streams (licensing the backlist to subsers ((subscription servicers))), charge more for each book…there are ways. Let’s assume, though, that they want to continue to sell a lot of books.

They can work through other retailers…but that might be like running from one room to another during an earthquake. It might not exactly be a safe harbor.

The other choice is that they sell directly…which is what I was discussing three years ago.

I think that is a much stronger possibility than it was.

Initially, consumers were insecure about buying e-books: now, they aren’t as much. It’s familiar: they might buy from a publisher (which they know less well) rather than going with Amazon.

“Social selling” is another big possibility. Similar to Amazon Associates, the publisher could directly compensate anyone that sells their books (within certain structures). So, you e-mail your sibling about a $4.99 book, they buy it from your link, you get $0.50. That 90% “keep” for the publisher is much better than what they get from Amazon now, even taking into account the costs of sale.

Multiply that many times over with social media, like Twitter, Goodreads (owned by Amazon), and so on.

Do we trust Amazon more than we trust our friends?

Would we feel better about our friends getting a little cash than Amazon getting it?

What if it was a non-profit? That might do even more for the sales.

No reason for a publisher like Hachette not to make the file “platform agnostic”…they could make a book file like an MP3, where it could be read on pretty much any device.

It would cost publishers quite a bit to set something like this up…I think readers would insist on cloud storage of their books, like they get from Amazon, but I think it’s entirely doable. As discovery becomes decentralized, Amazon becomes less important.

What would happen for Amazon?

Amazon would need to have customers make a bigger mental shift than Hachette would, in part because I think customers have a more well-formed conception of Amazon.

When the Kindle was first released in 2007, Amazon had a goal of “every book ever published…”

They’d have to drop that as a marketing point.

If they didn’t have some of the big books, they’d be under more obligation to make other books matter just as much. That might be books they publish themselves, but it could be other titles as well. That’s exactly one of the tactics they are trying during the Hachazon War: they are putting ads on the Hachette books’ product pages recommending alternate books which are cheaper or better reviewed.

If that is successful, it means Amazon doesn’t need those publishers’ books…although the tradpubs would definitely be leading discovery at first (people would go look for the new J.K. Rowling before bouncing to another choice).

Another possibility is that Amazon keeps providing the books to their customers…but doesn’t sell them itself.

I think that might have been missed as one of the most important things Amazon said in their recent Hachazon War statement:

“If you do need one of the affected titles quickly, we regret the inconvenience and encourage you to purchase a new or used version from one of our third-party sellers or from one of our competitors.” [emphasis added]
Announcement Hachette/Amazon Business Interruption (at AmazonSmile: benefit a non-profit of your choice by shopping*)

That’s right: somebody can buy that Hachette book from Barnes & Noble and then sell it to through Amazon…and Amazon charges for the service.

Third-party selling is very important to Amazon, and a good way for them to make money. Naturally, that only works with physical books at this point, and you might expect it to mean higher prices…but it is a way for Amazon to keep being a place where you can get the books. If a way to sell used e-books ever does come to fruition, that would also really feed this.

The third option for Amazon is to stop carrying a broad array of books.

While Amazon was originally positioned as an online bookstore, those days are gone. They are certainly still seen as a bookseller, but they are so much more. They could get out of the book retailing business and still have a very substantial business model (including web services and “fulfillment services”).

They might still sell Amazon published books (Amazon traditionally published and Amazon as a publishing platform for independent authors) in that scenario.

Both companies have viable alternatives to the publisher/retailer relationship.

The question may no longer be who needs the other company more…but whether or not they need each other at all.

What do you think? What would you do if you couldn’t get Hachette’s books from Amazon? Would you get them somewhere else? What if you could buy e-books from the publisher which would work on your Kindle? Would you be more likely to buy a book from a friend than from a store? Do you ever make buying decisions because it helps a non-profit? If Hachette and Amazon “break up”, would the other Big Five publishers follow…or might Random Penguin, for example, stick with Amazon (in the way that Random House did not go with everybody else on the Agency Model back in 2010)? Feel free to tell me and my readers what you think by commenting on this post.

Bonus deal:

Save $79 by getting the Kindle Fire HDX and the Fire TV bundle!

Amazon Fire TV & Kindle Fire HDX 7″ Wi-Fi 16GB with Special Offers (at Amazon Smile)

That’s $249…for both of them!

I very often use my KFHDX together with my Fire TV…one can almost be considered an accessory for the other.

The key thing is that the KFHDX mirrors very nicely to the Fire TV. Anything on my KFHDX can be displayed on through my Fire TV.

For one thing, that means that any video I can watch on my Kindle Fire I can watch on my TV…even if the app I am using would stop working if I connected an HDMI cable (which at least used to be the case with the Xfinity app). You could watch HBO GO that way.

I can watch videos from websites on my TV, by pulling them up on my Kindle Fire and mirroring to my TV.

This is definitely a good deal…so good that they are limiting it to one to a customer, and making it for a limited time only.

Already have one or the other? You could always give the duplicate as a gift…

New! Join hundreds of readers and try the free ILMK magazine at Flipboard! (many articles on the Hachazon War from different perspectives)

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Is Amazon delaying Hachette books?

May 10, 2014

Is Amazon delaying Hachette books?

This story is all over the blogosphere. Here’s a Google search with several big name results (CNNMoney, Christian Science Monitor, Publishers Weekly, Slate, New York Times…):

Google news search for “Hachette”

The source of it appears to have been this

New York Times article by David Streitfeld

The article, which seems to uncritically accept what one party in the situation says, starts with:

“Amazon has begun discouraging customers from buying books by Malcolm Gladwell, Stephen Colbert, J. D. Salinger and other popular writers, a flexing of its muscle as a battle with a publisher spills into the open.”

Are you sure you don’t want to throw an “allegedly” or “reportedly” in there?

I mean, this is the New York Times, right? Not some anonymous book blog?

Well, I’m sure they verified Amazon’s actions and motivations before running the article…or not.

The gist of the story is that Amazon is REPORTEDLY deliberately keeping low stock on some Hachette p-books (paperbooks), which results in waits of two weeks or more for customers to get them.

Before I start commenting on this, let me say that my background might paint me as prejudiced…on one side or the other. 😉 I was a brick-and-mortar bookstore manager, so that might put me in Amazon’s camp (since they are, in this instance a book retailer). I am also not an Amazon employee, but I have gotten money from them (royalties, for one thing).

On the other hand, I am (in a very small way) a publisher. I’ve published my own titles to the Kindle store…and Amazon could certainly mess me up if it chose to do that.

Okay, with that out of the way…

My first question is…is it true?

First, I did a search for Grand Central (one of Hachette’s imprints…and one suggested by the article) print books at Amazon.com:

Grand Central print books at Amazon.com (at AmazonSmile)

Looking at the “New and Popular” sort, I see

  1. No delay
  2. No delay
  3. No delay
  4. Pre-order
  5. Usually ships in 1 to 3 weeks (this is Robin Roberts’ Everybody’s Got Something)
  6. Pre-order
  7. No delay
  8. Pre-order
  9. No delay
  10. No delay
  11. No delay
  12. Usually ships in 3 to 4 weeks (The Hit by David Baldacci)
  13. No delay
  14. Usually ships in 3 to 4 weeks (Gone by James Patterson)
  15. No delay
  16. Usually ships in 2 to 5 weeks (Buvette: The Pleasure of Good Food by Jody Williams and Mario Batali)
  17. No delay
  18. Pre-order
  19. No delay
  20. No delay

Well, there are some books there with a significant delay.

My next question: are the books delayed at Amazon also delayed at Barnes & Noble?

Assuming that “usually ships within 24 hours” means that they don’t expect a delay, the answer was no…for all four of these.

Next, I’ll try some Random House titles, to see if they also have significant delays. I checked the top twenty Random House books, using the same technique I did for Grand Central: no delays.

So, tentatively at this point, I’ll say the evidence supports Hachette’s reported contention…Amazon may in fact be understocking Hachette’s books.

“Understocking?”

By that I mean that they aren’t keeping enough in stock to meet customer demand and get them delivered in a c0uple of days.

Why would that be the case?

It could be a deliberate bargaining tactic, as the stories suggest. The idea is that by delaying delivery, they are hurting Hachette.

However, wouldn’t that also hurt Amazon? The way they would be hurting the publisher is by reducing the sales…which also hurts Amazon.

I never think it’s a good tactic to annoy your customers to get back at your suppliers…I didn’t like it when stores did it to Amazon by not carrying Amazon’s traditionally published books, for example.

I think there might be a couple of other possible explanations.

One is that Amazon just blew it on the ordering. Certainly, that happened sometimes in my store. We way over-ordered on a Suzanne Summers book…because she lived in the area and we thought there would be a lot of interest. Maybe Robin Roberts got more publicity than they expected?

I don’t really think that’s likely. I think Amazon is generally good at ordering…and it would be pretty fluky if they just happened to be one publisher’s books (unless that publisher did something unexpected in terms of publicity).

Another one is that Amazon is experimenting…maybe trying to drive customers to e-books instead. In a case like that, they might pick one publisher’s books, or books that fit a certain profile (which might, coincidentally, align with a publisher’s content choices).

I would consider that…possible. Amazon has more (and I would guess increasingly) control in the e-book market than they do in the p-book market (although they are a major player there too, of course…and perhaps, becoming even more powerful as B&N wobbles on the edge of a cliff).

This might also simply be a way to try to cut costs and up profits…Roger Knights, one of my regular readers and commenters, had a strongly correct prediction about e-book prices rising at Amazon.

It costs money to store books. Every day a book sits in your warehouse (or back room, in a bookstore the size of the one I ran), you lose money on the sale. Maybe that’s making Amazon take more chances with low stock…and if Hachette’s return policies aren’t as friendly as other publishers, that could make them more likely to be hit by it…that’s just speculation, though.

Let’s sum this up:

Books unavailable? That’s a bad thing.

Is Amazon at fault here? I think that’s the most likely scenario.

What’s the plus side (there is always a plus side)? I suppose it might accelerate the shift to e-books, which I do see generally as a good thing (they are more accessible, less expensive for the most part, and as I understand it, more ecologically friendly).

If Hachette decides it needs to go more directly to readers, that’s very much more likely to be with e-books than p-books. Amazon is a behemoth in delivery, and does it for a lot of other companies. It would be very hard for a publisher to start doing D2R (Direct To Readers) with p-books…but a snap (logistically…marketing is a different question) with e-books.

Update: this additional

New York Times article, again by David Streitfeld

has two additional accusations against Amazon…claiming two more tactics against Hachette use by the e-tailer.

One is higher prices.

The other one, more intriguing, is running banner ads on a book’s Amazon product page…recommending similar, less expensive books.

That latter one, if true (and my intuition, without additional evidence, is that the story wouldn’t include this if it wasn’t), changes the math.

It would mean that Amazon could actually profit by reducing the sales of the Hachette books. Readers could be directed to books with more favorable terms..perhaps ones published by Amazon itself.

Nothing illegal about that…I wouldn’t even say it is unethical.

But it is sneaky. 😉

This second article focuses on how authors are hurt in these sorts of “spats”…certainly, that’s a motivation for them to publish independently in the future. Is that good for Amazon? Sure, that’s where most of them would indie publish!

Is that the real goal? Get authors out of publishers completely, and into controlling their own destinies…but using Amazon’s distribution platform?

Hmmmmmm….

Customers, of course, are also hurt by this…that’s where I would advise Amazon to be careful, if they are doing this at all. Even if a customer can get a cheaper (perhaps even better) alternative, most of them won’t get that emotionally. They’ll just get that Amazon doesn’t have the book they wanted it, when they wanted it, at the price they wanted.

That’s the sort of mistake Amazon hasn’t tended to make in the past…I hope they don’t let pressure for greater profits make them change their three core values: price; service; and selection.

What do you think? How bad is this? If this is Amazon’s fault, would that surprise you? Do you see it as part of a general trend? If the move towards popular reading being done with e-books rather than p-books accelerates, do you think that’s a good thing? Feel free to tell me and my readers what you think by commenting on this post.

New! Try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get. :) Shop ’til you help! :) 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.


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