Sunday, August 10, 2014

BATTLE TACTICS: AMAZON AND THE PUBLISHERS



Writers Caught in the Middle.

In the battle between Amazon and Hachette, where do authors stand? It's an important question. Authors produce the contents of e-books. Their welfare should be paramount. However, regardless which side they support, authors are caught in the middle.

What is the battle about between Amazon and Hachette? On the surface, the Amazon wants lower prices for e-books and publishers, led by Hachette, want higher prices.

At another level, it's about innovation in book distribution: from hard copy to electronic copy (i.e. Kindle, Amazon's brand name for its e-pub businesses.)

Amazon refers to Hachette as a "big U.S. publisher and part of an $18 billion media conglomerate." Amazon's letter doesn't state what the $18 billion figure measures in accounting terms. It sound enormous until you compare it to basic Amazon financials. Just for reference, Amazon's revenue amounts to about $100 billion per year. Its equity plus liabilities totaled $37,898 billion on June 30, 2014. Lagardere, the French parent company of Hachette, had total debt plus equity on December 31, 2013 of $11,164 billion. Amazon wins the title of "big. . .conglomerate" battle by most calculations. Let's just say that writers are tiny tots compared to the Amazon/Publisher giants.

My personal experience suggests that writers as authors of e-books are caught in the middle. I'd like to think that Amazon is fighting for me. The reality is that I paid Amazon to convert my print edition to the Kindle format. So far, I have sold not one single e-book on Kindle, so my payment is a total loss to date for me and a gain for Amazon. Amazon will have to sell many e-books for me to be able to report a profit at year end.

When I do sell an e-book, the buyer will pay $2.99 to Amazon to download a single copy. I have no clear idea how my royalty payment will calculate in either instance. That's what matters to me: the royalty and the support the distributor (Amazon/Kindle) provides me in marketing.

As an e-book author I could accede to Amazon's request to write an email to the C.E.O. of Hachette. If I do so, my email will make no difference in the battle between the giants. A factor that will make a difference will be the legal framework under which publishers work. Another, bigger factor, will be the the decisions of purchasers of the product, the e-book.

As an author I say "Let the market and the law set the price." Competition can do wonders for price-setting, and authors will have to adjust to the results. We have no other choice. There's really no gain in writing a letter. The market will overpower any number of author letters. We're caught in the middle.

One other thing: please support your authors by buying a hard-copy editions! Enjoy the feel of a page as you turn it, the feel of the book as you hold it, and the look of the book on your library shelf. I'm just now looking at the front cover of a paperback edition of Things Fall Apart by Chinua Achebe. I read from it in about 1963. I've read from it many times since, including this year. I like its look on my library shelf. I could say the same for many volumes of hard copy books I own. The sight of my books helps me remember who I am. I don't know that I could say that for e-books.

As always, thanks for reading this post.

P.S. I did send my thoughts to the CEO of Hachette and copied Amazon.com. The letter paralleled this post.


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