Amazon

The New Bestseller Lists

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This post by L.J. Sellers originally appeared on The Kill Zone on 8/11/14.

Elements of the publishing industry have never been more hotly debated! The most passionate discussion is the Amazon/Hachette dispute over distribution terms and pricing, but another issue has come up that may have a broader effect on authors. Or at least, a more personal influence.

Amazon’s new Kindle Unlimited program was unveiled recently, and it’s already affecting the measure by which authors all live—the Kindle bestseller lists.  I’ll get to that in a moment, but first the background: Kindle Unlimited (KU) is a subscription service for ebooks. For $9.99 a month, readers can download all the digital books they want. So far, the books included in the service mostly come from the Select program of Kindle Direct Publishing (KDP) and Amazon Publishing (AP) imprints.

[You can enroll in the KDP Select program by clicking on the box when you upload your book. When you click the Select box, you’re agreeing to make that ebook exclusive to Amazon and not sell it in ebook form anywhere else. In exchange, you get various promotional opportunities, plus you’re enrolled in KOLL (the lending library), so you get paid each time someone borrows your book. And now, with the new program, you’re also in Kindle Unlimited, for even more paid sales.]

 

Click here to read the full post on The Kill Zone.

 

What Does Amazon/Hachette Have to Do With Me?

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This post by Barry Eisler originally appeared on his blog on 8/9/14.

In connection with the $100,000 ad some reactionary authors bought to run in tomorrow’s New York Times, Amazon has sent a letter to its self-published authors. It’s a good read, with some interesting historical context, for anyone who values low-priced ebooks and fair royalties for writers. And if you want to share your opinion on those topics with the CEO of “Big Five” publisher Hachette, you can email him — just scroll down the Amazon letter. Here’s what I said:

Hi Michael, even if the Big Five (why would anyone imagine something called the Big Five could be a cartel?) still had the power to control the market — and you don’t — the best you could do through agency and windowing and the like is delay the inevitable mass market transition to digital. Is that really who you want to be? A reactionary, focused on shoring up the next quarter rather than expanding your opportunities for the long term?

I don’t want big publishing to die — I want it to get well. But to get well, you’re going to have to change the lifestyle that’s led to your ongoing decrepitude.

Please, think about the future. Think about your place not just in the Big Five, but in the world. Stop impeding what’s best for readers, writers, and reading. Don’t fight progress. Be progress.

Sincerely yours,
Barry Eisler
www.barryeisler.com

I’ve seen some interesting reactions to the Amazon missive. I responded to some of them over at The Passive Voice, which consistently has some of the best industry coverage I’ve seen (both for Passive Guy’s presence and the insights of the people who comment there). I’ll address those reactions here, as well:

1. Amazon and/or Hachette are trying to get me to do their bidding, drag me into their war, dragoon me, etc.

 

Click here to read the full post on Barry Eisler’s blog.

 

Michael Cader of Publishers Lunch In Conversation With J.A. Konrath

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide to Publishing blog on 8/1/14.

Joe: Yesterday I fisked Mike Shatkin, who openly brags he doesn’t read my blog, and has removed my comments from his blog because he felt them too long.

I also fisked Michael Cader from Publishers Lunch.

Cader, however, showed he doesn’t fear debate, and had no problem sharing his opinion in a forum where many have a contrary point of view. He responded to my points in the comment section, and that took integrity and more than a little bit of guts.

Michael Cader: Hi, Joe. I’m glad we have at least some points of agreement. Some of your other replies are tangential rather than on point.

Joe: Thanks for responding, Michael. While it isn’t unprecedented for people I blog about to respond, it is certainly unusual, and shows both an open mind and a willingness to engage. You have my respect.

Cader: Amazon is very careful with their words, even if not elegant. The post begins, “A key objective is lower e-book prices.” A lot of traditional media have written the post up as if it said “The key objective…” What are the other key objectives, Amazon? Why do your conversations with people in the trade talk about looking for your fare share of the “business efficiencies” produced by a rising ebook market and your investments, while your public words are only about pricing objectives.

Joe: Well, we agree that Amazon is careful with their words. It’s unusual to hear an observation like that leveled as a criticism. Does Cader prefer the Hachette approach, which is to clear English what a chainsaw is to a tree…?

 

Click here to read the full post on A Newbie’s Guide to Publishing.

 

It is Hard for Publishers to Apply Even Harvard B School Advice in Their Struggle With Amazon

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This post by Mike Shatzkin originally appeared on The Shatzkin Files on 7/15/14.

Harvard Business Review published an article recently by Benjamin Edelman called “Mastering the Intermediaries” which gives advice to businesses trying to avoid some of the consequences of audience aggregation and control by an intermediary. The article was aimed at restaurants who don’t want their fate controlled by Open Table or travel companies who don’t want to be beholden to Expedia. The advice offered is, of course, scholarly and thoughtful. It seemed worth examining whether it might have any value to publishers suffering the growing consequences of so much of their customer base coming to them through a single online retailer.

The author presents four strategies to help businesses reduce their dependence on powerful platforms.

The first suggestion: exploit the platform’s need to be comprehensive.

The author cites the fact that American Airlines’ strong coverage of key routes made its presence on the travel website Kayak indispensable to Kayak’s value proposition. As a result, AA negotiated a better deal than Kayak offered others or than others could get.

Despite some suggestions in the late 1990s that publishers set up their own Amazon (which they subsequently half-heartedly tried to do with no success) and a couple of moves to cut Amazon off by minor publishers that were minimally dependent on trade sales, this tactic has never really been possible for publishers on the print side. Amazon began life by acquiring all its product from wholesalers — primarily Ingram and Baker & Taylor — before they switched some and ultimately most of its sourcing to publishers to get better margin. But the publishers can’t cut off the wholesalers without seriously damaging their business and their relationships with other accounts, and the wholesalers won’t cut off Amazon. So for printed books, still extremely important and until just a couple of years ago the dominant format, this strategy is not worth much to publishers.

 

Click here to read the full post on The Shatzkin Files.

 

Kindle Book Pricing and How the Big Guys Don’t Get It.

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This post by Dennis Blanchard originally appeared on the K1YPP blog on 7/10/14.

I love to read. For some reason, as a young reader, I missed many of the classics. I’ve made up for lost time over the years by “catching up.” Books like The Catcher In The Rye, Of Mice And Men, White Fang and On The Road have been books that I’ve only read in the last twenty years or so. The same goes for movies, I’ve caught up on The African Queen, Casablanca, The Godfather and others in the last few years. How did I miss them? I don’t know, perhaps I just spent so much time outside when I was younger, I just missed them. That is a subject for another time.

Yesterday, I read a news piece on CNN about an author that was gored running with the bulls in Pamplona. Bill Hillmann, author of “Fiesta, How To Survive The Bulls Of  Pamplona.” How ironic. It occurred to me that I had not read anything much by Hemingway recently, so I decided to take a look online and see if I could find his book, “The Sun Also Rises.” I figured that, surely, by now, it must be on Kindle for an inexpensive price, or perhaps, even free. Surely.

 

Click here to read the full post on the K1YPP blog.

 

Judge Orders Unmasking of Amazon.com “Negative” Reviewers

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This article by David Kravets originally appeared on Ars Technica on 7/11/14. While the case in question concerns nutritional supplements, this precedent has wider implications for ALL Amazon reviews, including book reviews.

Decision broaches anonymous commenting versus unfair business practices.

A federal judge has granted a nutritional supplement firm’s request to help it learn the identities of those who allegedly left “phony negative” reviews of its products on Amazon.com.

The decision means that Ubervita may issue subpoena’s to Amazon.com and Cragslist to cough up the identities of those behind a “campaign of dirty tricks against Ubervita in a wrongful effort to put Ubervita at a competitive disadvantage in the marketplace” (PDF).

According to a lawsuit by the maker of testosterone boosters, multivitamins, and weight loss supplements, unknown commenters had placed fraudulent orders “to disrupt Ubervita’s inventory,” posted a Craigslist ad “to offer cash for favorable reviews of Ubervita products,” and posed “as dissatisfied Ubervita customers in posting phony negative reviews of Ubervita products, in part based on the false claim that Ubervita pays for positive reviews.”

 

Click here to read the full article on Ars Technica.

Also see this related story on Consumerist: Court Orders Amazon To Reveal Identities Of Negative Reviewers.

 

Authors Behaving Badly and Authors Who Aren't

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide To Publishing blog on 7/3/14.

So a bunch of legacy authors–many of them smart and who should know better–just signed a letter accusing Amazon of things that simply make no sense.

Some of the usual suspects are at the forefront. James Patterson, who continues to show he has no clue about how his own industry works. Scott Turow, whose tenure as president of the Authors Guild amounted to being a shill for Big Publishing. Douglas Preston, who once supported windowing ebook titles and keeping prices high.

Preston recently said:

“If I were Jeff Bezos, the one thing I would fear most is if authors organized themselves and took broad, concerted, sustained, and dignified public action.”

Konrath replies:

“If I were Jeff Bezos, I would know that legacy authors have no power, because they signed away their rights to their publishers. Patterson, Turow, and Preston couldn’t remove their books from Amazon even if they wanted to. But, strangely, I don’t hear any of them demanding it, or even mentioning it.”

Naturally, I’m going to fisk this letter. Then I’m going to link to a different sort of letter for authors to sign. Hugh Howey and I, along with Barry Eisler and others, have been fiddling with this letter for the last 24 hours, and it explains to readers what’s really happening with the Amazon/Hachette dispute.

 

Click here to read the full post on A Newbie’s Guide to Publishing.

 

A 'Wimpy' Plan to Save the Physical Book

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This article by Sona Charaipotra originally appeared on The Atlantic on 6/20/14.

Children’s author Jeff Kinney’s new shop will emphasize reading as a tangible, community experience in a digital, fractured world.

Jeff Kinney, the man behind the astonishingly powerful Diary of a Wimpy Kid series, is leading the revolution.

That’s been the theory behind the bestselling author’s just-announced plans to open up an indie bookstore in tiny Plainville, Massachusetts. It’s been framed as a call-to-arms against Amazon in the wake of its strong-arming tactics in negotiating with the big five publishing houses, starting with (fellow giant) Hachette.

Take back the power, fight the system, and all that, right?

Wrong.

If Kinney’s stoking a counterculture, it’s to harken back to the past. In his Plainville shop, he imagines a cozy, well-worn space with old tomes and tea, frequented by locals and writerly souls. “A physical book has a heft, a permanence that you don’t get digitally,” says Kinney in an interview. “So our hope is that the bookstore will remain a vital, important part of communities across the country and the world.”
 

Click here to read the full article on The Atlantic.

 

They Might Be Giants

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This post by Philip Jones originally appeared on FUTUReBOOK on 6/24/14.

Are we at the beginnings of a backlash against big tech? Last week the New Yorker published a disruption takedown from Jill Lepore in which she castigated the tech community for its “reckless and ruthless” philosophy of disruption. Over the weekend the Observer criticised tech companies for sometimes thinking “they are above good rules”. A few weeks ago the New Statesman ran a series of articles puncturing the Silicon Valley dream, and warning about the “political and social damage that may be done by the future land-grab being pursued by the big internet companies”.

For publishers the context for this are the ongoing negotiations between Amazon and its suppliers over supremacy in the book business. As The Bookseller exclusively reported yesterday, Amazon’s latest terms indicate a direction of travel that would see the online retailer take a sizeable control over both a publisher’s inventory and its marketing. Can’t deliver fast enough to meet Amazon’s super-efficient distribution machine? Amazon would now POD the book. Not sure how best to market a book, or a list? Amazon could do it for you, albeit for a cut of the turnover.

 

Click here to read the full post on FUTUReBOOK.

 

Is Amazon Good For Books? and other dumb questions

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This post by Robert Kroese originally appeared on his site on 6/10/14.

I finally got around to reading George Packer’s article in the New Yorker entitled “Cheap Words: Amazon is good for customers. But is it good for books?” yesterday. Spoiler alert, in case you haven’t read the article: Packer doesn’t answer the question. In fact, he doesn’t even really address the question. Most of the article is taken up with head-shaking reminiscences of Amazon’s ruthless business practices, its treatment of books as “widgets” rather than the lovingly birthed children of the tortured souls of artists, and a few anecdotes about poor working conditions in warehouses (another spoiler: warehouses, by and large, are not fun places to work). Finally, in the concluding paragraphs, Packer gets around to the question at hand:

Several editors, agents, and authors told me that the money for serious fiction and nonfiction has eroded dramatically in recent years…. These are the kinds of book that particularly benefit from the attention of editors and marketers, and that attract gifted people to publishing, despite the pitiful salaries. Without sufficient advances, many writers will not be able to undertake long, difficult, risky projects.When consumers are overwhelmed with choices, some experts argue, they all tend to buy the same well-known thing….

These trends point toward what the literary agent called “the rich getting richer, the poor getting poorer.” A few brand names at the top, a mass of unwashed titles down below, the middle hollowed out: the book business in the age of Amazon mirrors the widening inequality of the broader economy….

 

Click here to read the full post on Robert Kroese’s site.

 

The War on Amazon is Big Publishing's 1% Moment. What About Other Writers?

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This post by Barry Eisler originally appeared on The Guardian on 6/4/14.

More people are buying more books than ever, and more people are making a living by writing them. Why do millionaire authors want to destroy the one company that’s made this all possible?

As an author of ten novels – legacy-published, self-published, and Amazon-published – I’m bewildered by the anti-Amazon animus among various establishment writers. James Patterson pays for full-page ads in the New York Times and Publishers Weekly, demanding that the US government intervene and do something (it’s never clear what) about Amazon. Richard Russo tries to frighten authors over Amazon’s “scorched-earth capitalism”. Scott Turow conjures images of the “nightmarish” future that Amazon, “the Darth Vader of the literary world”, has in store for us all. And “Authors Guild” president Roxana Robinson says Amazon is like “Tony Soprano” and “thuggish”.

These are strange things to say about a company that sells more books than anyone. That singlehandedly created a market for digital books, now the greatest source of the legacy publishing industry’s profitability (though of course legacy publishers are sharing little of that newfound wealth with their authors). That built the world’s first viable mass-market self-publishing platform, a platform that has enabled thousands of new authors to make a living from their writing for the first time in their lives. And that pays self-published authors something like five times as much in digital royalties as legacy publishers do.

I can think of at least several explanations for the strange phenomenon of authors – and an entity calling itself the calling itself the “Authors Guild” – railing against a company that sells so many books, that treats authors so well, and that has created so many new opportunities for writers. Basically: equating the various functions of publishing generally with the legacy industry specifically; blaming Jeff Bezos for technology; and experiencing judgment clouded by self-interest.

 

Click here to read the full post on The Guardian.

 

10 Things You Need To Know About Publishing FanFic on Amazon

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This post by Tara Maya originally appeared on her Tara Maya’s Tales site on 6/27/13.

Amazon is rocking the publishing world once again with a brand new kind of publishing: legal fan fic. Okay, there have been licensed novels before… Star Trek novels, Star Wars novels, movie novelizations… but this is far more accessible.

It’s called Kindle Worlds. Right now, there are only about twelve Worlds available to write in. Some biggies, like Harry Potter and Twilight, are not on the list. A few are television worlds, a few are author’s own worlds (such as Wool).

However, before you break out dancing and toss your Snape and Legolas slash romance/adventure into the ring, there are a few things you need to know about publishing fan fiction with Amazon.

 

1. This is not self-publishing, as with KDP.

Amazon’s self-publishing platform, KDP, allows authors to keep all rights to their own works. Amazon takes a cut of the royalties as a distributor, but Amazon is not the publisher. With Kindle Worlds, “All works accepted for Kindle Worlds will be published by Amazon Publishing.”

That said, this doesn’t seem intended to be as exclusive as the Singles program. Amazon wants your content, as long as it’s not something they will be sued over.

 

2. The steps seem pretty easy.

 

Click here to read the full post on Tara Maya’s Tales.

 

Announcement Hachette/Amazon Business Interruption

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This post from the Amazon Books Team was posted on the Amazon site on 5/27/14.

We are currently buying less (print) inventory and “safety stock” on titles from the publisher, Hachette, than we ordinarily do, and are no longer taking pre-orders on titles whose publication dates are in the future. Instead, customers can order new titles when their publication date arrives. For titles with no stock on hand, customers can still place an order at which time we order the inventory from Hachette — availability on those titles is dependent on how long it takes Hachette to fill the orders we place. Once the inventory arrives, we ship it to the customer promptly. These changes are related to the contract and terms between Hachette and Amazon.

At Amazon, we do business with more than 70,000 suppliers, including thousands of publishers. One of our important suppliers is Hachette, which is part of a $10 billion media conglomerate. Unfortunately, despite much work from both sides, we have been unable to reach mutually-acceptable agreement on terms. Hachette has operated in good faith and we admire the company and its executives. Nevertheless, the two companies have so far failed to find a solution. Even more unfortunate, though we remain hopeful and are working hard to come to a resolution as soon as possible, we are not optimistic that this will be resolved soon.

Negotiating with suppliers for equitable terms and making stocking and assortment decisions based on those terms is one of a bookseller’s, or any retailer’s, most important jobs. Suppliers get to decide the terms under which they are willing to sell to a retailer. It’s reciprocally the right of a retailer to determine whether the terms on offer are acceptable and to stock items accordingly. A retailer can feature a supplier’s items in its advertising and promotional circulars, “stack it high” in the front of the store, keep small quantities on hand in the back aisle, or not carry the item at all, and bookstores and other retailers do these every day. When we negotiate with suppliers, we are doing so on behalf of customers. Negotiating for acceptable terms is an essential business practice that is critical to keeping service and value high for customers in the medium and long term.

A word about proportion: this business interruption affects a small percentage of Amazon’s demand-weighted units. If you order 1,000 items from Amazon, 989 will be unaffected by this interruption. 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.

We also take seriously the impact it has when, however infrequently, such a business interruption affects authors. We’ve offered to Hachette to fund 50% of an author pool – to be allocated by Hachette – to mitigate the impact of this dispute on author royalties, if Hachette funds the other 50%. We did this with the publisher Macmillan some years ago. We hope Hachette takes us up on it.

This topic has generated a variety of coverage, presumably in part because the negotiation is with a book publisher instead of a supplier of a different type of product. Some of the coverage has expressed a relatively narrow point of view. Here is one post that offers a wider perspective.

http://www.thecockeyedpessimist.blogspot.com/2014/05/whos-afraid-of-amazoncom.html

Thank you.
 

Amazon vs. Hachette: What It’s About And Why I’m Rooting For Amazon

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This post by Publetariat founder and Editor in Chief April L. Hamilton originally appeared on her Digital Media Mom site on 5/24/14.

As you may have heard, or read, or discovered while browsing Kindle books on the Amazon site, Amazon is currently in the middle of a battle with “Big 5″ publisher Hachette. The beef is over reseller wholesale contract terms (the publisher’s ‘cut’ on every ebook of theirs sold by Amazon), and Amazon has been using some strongarm tactics to remind Hachette that Amazon doesn’t HAVE to sell Hachette books at all if the parties can’t come to an agreement.

 

First, a little background is needed.

Back when the Kindle was new and ebooks were just starting to become a thing, say 2008 or so, Amazon established wholesale terms with publishers on ebooks based on the “fixed price” (usually known as a “suggested retail price” in other industries, for other products) which was set by the publishers. Amazon could discount the actual sales price of ebooks to whatever they wanted, or even offer them for free, so long as they paid the publisher the wholesale rate that was based on the publisher’s fixed price.

For example, if the publisher’s fixed price was $15 (seriously, that’s the average of the fixed prices the Big 5 publishers were setting; on some ebooks they wanted to go as high as $18) and the publisher’s wholesale cut was 40%, Amazon would have to pay the publisher $5.60 for every copy sold or given away on Amazon. Whether the ebook ultimately sold for $10, $6, or was given away for free, Amazon owed the publisher $5.60 for every copy distributed to Amazon customers. As a result, Amazon was (and still is) actually LOSING money on many ebook sales, but they were willing to take the hit to establish their Kindle line as dominant among ereaders.

 

A couple years down the road, publishers started to get nervous.

In 2010 publishers decided they didn’t want Amazon to have the right to set its own prices on their ebooks anymore, even though Amazon’s retail pricing didn’t affect their wholesale cut AT ALL. They feared that if Amazon were allowed to establish $9.99 in the minds of consumers as a standard price point for frontlist ebooks (new release ebooks the publisher expects to sell well), they would never succeed in rolling out their own, much higher fixed prices. And they were probably right about that, but only because the fixed prices they had in mind for frontlist ebooks were ridiculously high to begin with.

 

Click here to read the full post on Digital Media Mom.

 

Will Barnes & Noble be gone by New Year's?

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This editorial by Michael Levin originally appeared on The Contra Costa Times News on 5/2/14.

If anyone gives you a Barnes & Noble gift card, be sure to cash it in by the end of the year.

This may be the last year that Barnes & Noble bookstores remain open.

It’s bad news for people who love books. It’s worse news for the next generation of readers, who may never experience buying a book in a bookstore.

B&N has been closing about 20 stores per year since 2012 and has said it will continue to do so for the next several years. But its financial position is bleak.

This follows a decades-long period of expansion, moving into neighborhoods where privately-owned bookstores thrived, destroying those stores with cut-price best-sellers, and all but owning the book business.

Borders collapsed because of poor choices — weak locations, an overemphasis on music, and, worst of all, selling off its online bookstore to Amazon for $20 million in the 1990s. Chump change, by today’s standards.

So why is B&N on the ropes, if it has virtually no competition today from chains or privately owned bookstores?

 

Click here to read the full editorial on The Contra Costa Times News.