Amazon or Hachette: Which Would George Washington Choose?
Monday, June 09 2014 @ 11:17 PM CDT
Contributed by: Andy Updegrove
Unless you’ve been taking a holiday from the news for the past month, you are already aware that Amazon is in the midst of a very nasty negotiation with Hatchette, one of the “Big Five” U.S. publishers. Together, as a result of a decades-long series of acquisitions, these five companies have consolidated virtually all of the most-revered, but now conglomerate-owned, publishing houses in the U.S. Given the degree of respect that books still command, the dispute has attracted far more public commentary than commercial disputes in such a narrow market usually attract.
An extraordinary amount of that commentary has been partisan: on the one hand, there are the traditionalists, who decry the fact that Amazon, a near-monopolist in the distribution of books, has the power not only to dramatically delay the shipment of Hatchette’s products, but to wreak significant collateral damage on the legion of Hachette authors that have no say in the negotiation at all.
And on the other hand, there is a horde of authors who have spent many years feeling abused by what they believe has become a totally bottom-line oriented, feckless, author-indifferent, cadre of publishers who are simply getting what they deserve, and far too late at that, thank you very much. They see Amazon not as a brutish Internet bully terrorizing the genteel world of publishing, but as a kind of avenging Lone Ranger with a Kindle in each holster, who one day rode into town to rescue of the Indie authors of the world.
As evidence of their reading of the facts, the latter group points to the far more generous (70%) royalties that Amazon pays authors for eBooks priced at $2.99 or above, as compared to the miserly pittance (25%) that traditional publishers dole out to authors each time a stream of virtually free electrons Whispernet’s another copy of an eBook to a buyer.
So which one is the real enemy of the author? Is it Amazon or Hatchette? And is either of them really a friend?
The answer to both questions, of course, is “neither,” and authors would do well to realize that. And if you don’t believe me, you can take George Washington’s word for it.
That’s right. One of the fundamental tenets to which the Father of our Country held dear throughout his life was the conviction that no nation acts other than in its self-interest. Consequently, no treaty or alliance will live longer than the self-interest of both sides dictates. Anyone that ascribes any other motivation to the actions and commitments of nation-states is delusional, and will ultimately bear the unfortunate consequences of their naiveté. Today, no student of history or diplomacy would entertain even the possibility that a different state of affairs could exist.
How does this apply to the current commercial dispute? Most obviously, it speaks to the school of thought that Amazon is a white knight that has ridden to the defense of the poor, weak author underclass. Unfortunately, this is at best an anthropomorphic view of corporate conduct. Amazon does not “care” about authors at all. Amazon cares about inexorably increasing the number of customers it serves, and about maximizing the total percentage of each customer’s purchasing dollars that end up in Amazon’s coffers. The only thing that differs between its strategy for selling more toothpaste and its master plan for achieving a true monopoly in book sales is the tactics adopted for each product line. Can you seriously believe anything different?
For the last several years, this has meant that Amazon has found it in its self-interest to take a number of actions – first, by finally making the eBook an attractive product through its innovative design, pricing and promotion of the Kindle, and second, by making it potentially more profitable for an author to self-publish rather than to sell through a traditional publisher. And to be sure these actions have been wildly beneficial to the vast majority of authors that have been unable to attract the attention of an agent, much less of a publisher.
Amazon’s pricing and revenue sharing model, conjoined with the opportunities that the Internet has opened up to permit individual authors to successfully promote their own wares, has wreaked devastation on the traditional publishing landscape, almost all of which has benefited authors (if not always the quality of the prose reaching the reader). And again, to be sure, the traditional publishers have not only declined to raise the profit percentage that they are willing to share with authors, but also lowered advances, and pushed more of the costs and burdens of production and promotion back onto their authors.
The obvious rub is that to Amazon, a book really is the same as a tube of toothpaste, however much the Amazon camp would like to believe otherwise (truly, I’m not sure why). There is not a shadow of a doubt in my mind that once the battle has been won, and the traditional publishers vanquished, there will be simply no reason at all for Amazon to continue to pay authors 70% of the sale price for an eBook – because by then, authors will have no real option but to complete the vast percentage of their sales through Amazon.
And why would they? As the founder of our country would observe, once the alliance between Indie authors and Amazon no longer serves a useful purpose to Amazon, that alliance will be abrogated, with the notice being a steadily plummeting percentage of profits being allocated to the author. If you really think it could be otherwise, then I suggest you look at the pricing of every other product being sold on Amazon. Why would books be treated any differently?
So where does this take us, and what result should authors (and readers!) be advocating for instead?
For that, we need to turn not to diplomats, but to economists and regulators. Their advice would be simple: what the marketplace needs is continuing competition, and not transient competition that ends with the subjugation of the Big Five and a monopoly in the hands of Amazon. What the author and the reader really need is for sustaining, robust competition by sellers for the privilege of bringing the next great author to the marketplace, and to helping the reading public discover that author when they do.
Thus, the answer truly is “neither,” because if the Big Five are victorious, a sick industry will stay sick, and authors will continue to languish, neglected and (too often, apparently) abused. And if Amazon wins, not only will author profit shares end up at (or below) what traditional publishers now pay, but authors will continue to have to shoulder 100% of the costs of editing, proofreading, and promotion as well. As they say, name your poison.
What the author and the reader should truly hope for is that Amazon does not win, and therefor feels that it must continue to pay authors well, and to continue to seek new ways to make Amazon’s platform serve authors better.
Authors and readers should also hope that, against all odds, traditional publishers will somehow find their way out of the wilderness, and start effectively competing again - for starters, by resuming the services that their infrastructure is better able to provide: recognizing and nurturing new talent, editing and proofreading, shouldering most of the costs and time demands of promotion, and handling the business end of the process so that writers can spend more time writing.
Most of all, authors and readers should hope that new entrepreneurial publishing ventures will be launched that succeed where so many to date have failed. At minimum, we need new businesses that partner with authors – rather than simply take their money – to do all of those things that publishers used to do and that Amazon does not. We also need new distribution channels in addition to Amazon.
So enough with the score settling, and enough with the belief that Amazon is in it for the author, or that Amazon is a barbarian at the gate. The best way to keep Amazon pro-author is to be sure that it needs to compete with someone else to keep an author’s business and have access to her content.
And if you don’t believe me, well, then take George Washington’s word for it.
Psst - yes you! Wanna read a good book?