Saturday, 9 August 2014

The Book Report: Just Who Is Uniting Here?

Amazon has sent out an e-mail to just about everyone on the planet, and also opened a website called READERS UNITED, which they're using to declare themselves as the defender of the little guy against big meanie Hachette, and that all they want is to bring down the price of e-books.

Amazon makes some valid points.

1. E-books should be cheaper than a hardcover since they don't involve manufacturing a physical product, simply formatting an already digitized file and storing it on servers with literally billions of other books.

2. The publishing industry, especially among the Big 5, are slow to appreciate that e-books should be cheaper. The irony is that they don't need to engage in active illegal collusion on the matter, since the top echelons of the Big 5 have a long history of being resistant to change, and a reputation for moving like a herd without having to collude over anything. They treat publishing as a gentleman's club, sans strippers, and act accordingly, refusing to rock the boat.

However, is Amazon really the champion of the little guy in this fight?

Not really.

You see Amazon wants a monopoly on the book business, plain and simple. When you want a book, they want you to go to them and only them.

That's not healthy.

Not for publishers.

Now for writers.

Not for readers.

And actually not for Amazon in the long run.

This is because monopolies follow a pattern: Growth, Power, Decay, then Collapse with some government bailouts in between. The wannabe Monopolists can't avoid this pattern, but they hope to be long retired to their billionaire mega-mansions before the monopoly they created hits the Decay stage.

Building a monopoly is also damaging in the short run. To crush their competition Amazon is using their status as a major bulk retailer to slash their prices to levels no one else can match.

The problem is that Amazon can't match these prices either, and are racking up massive losses that they can't keep up doing forever. They need someone else to start losing money too, and they hope the publishers will go along with them.

Only Hachette isn't playing ball.

Now this is where I'm going to butt my know-it-all nose in.

The problem with e-book pricing is that they are not natural prices.

You see pricing is all about balance.

It's about finding that balance between what allows the manufacturers and retailers to profit, and the price the consumers are willing to pay.

Manufacturers like publishers, and retailers like Amazon, all have expenses. Publishers have to pay writers, editors, printers, technical staff, etc… and Amazon has to maintain offices, warehouses, and a massive tech-support staff. All those have to be included in the calculations when determining a price.

Then they have to include to average numbers of units they move, and how much consumers are willing to pay for what they're offering.

Go too high, and consumers will move on, charge too low, and you can't make payroll.

Amazon wants to go too low, but wants the publishers to suck up those losses so they can still make payroll. The publishers, like any business,  do not like losses, and use any sort of setback in business as an excuse to shit on the non-celebrity authors in their roster.

What both sides need to do is to step the fuck back and let a natural price form and use discounts for special offers and sales. That's what happened to the paperbacks that Amazon likes to cite, and they became a vital part of the business.

If they do let nature take its course they might find that everyone can be happy from the deal, publishers, writers, retailers, and readers.

So take a stand when buying e-books from Amazon and only buy all three of these e-books:

JOE AVERAGE - 2 Four-Star reviews for its mix of superhero action, satire, and even political intrigue.

MINDER - A complex thriller about a killer hired to stop other killers from committing a killing.

STUDIO NOTES FOR LITERARY CLASSICS - A cute little e-book that answers the question "What if the great works of literature had to deal with the meddling that goes into modern movies."

You can't blame me for a little shameless self-promotion.

I like money but never have enough of it.


  1. Rainforest Giant9/8/14 2:33 pm

    The big five should buy Oyster and put together a service that depends on the Nook for distribution.

    That would hit Amazon from two sides at once. Since I believe the big five are as lively as Amenhotep, there is zero chance they'll go that route.

    They'll use lawfare, media pressure, and the inertial power of their sheer massive presence to keep pushing against the wind.

    They've already lost on ebooks. They could use a little judo on Amazon but they are wedded to the past.

  2. Rainforest Giant9/8/14 2:47 pm

    I thought you had some scifi too?

  3. Joe Average is classified as science fiction since a meteorite caused everything & not a wizard. ;-)

  4. I have to say, and I truly mean this with all respect, but I think you are nearly 100% wrong on this issue. Amazon might not be doing this for the good of the planet, but every writer except for superstars, and certainly the consumers, will be better off with lower eBook prices.

    The elephant in the room which you don't address is that the big five publishers solely want eBook prices kept artificially high because they are attempting to make them as unattractive to readers as possible. Their grip on publishing slips every time eBooks sales go up compared to paper sales, and they are panicking about it. I worked in a library for most of the last 25 years, and I can tell you the big publishers have been unremittingly hostile to eBooks from the start.

    The fact is, every writer from midlisters on down are better off self-publishing now than signing up with a publisher, especially the big five. They own their work, keep all the media rights, don't have to worry shady bookkeeping, and earn more money per sale while lowering prices and thus selling more books. A two or three dollar eBook will garner a lot more impulse buys than a $20 print book.

    The publishing industry also greatly fears losing their gatekeeper status, because that's what provides them a level of cultural power and the resultant smugness they derive from it. As you know from your knowledge of the film industry, this aspect can not be overemphasized. This is the basis of their whole sense of superiority, which is integral to them.

    There's a place for traditional publishing in the future, but it's a far, far smaller one. More people than ever will make a living from writing, or at least make some money off their effort. There might be fewer massively successful writers (maybe).

    That's a good tradeoff, I think, but even that's not the real point. The real point is that publishing has been democratized now and no matter what you think about that, there's no putting the genii back in the bottle. Amazon points towards the future on this issue (even if they are eventually looked upon as the cattle barons of this era), publishers the past. That's the only valid way to look at it, in my opinion.

  5. Ken-

    I said that both sides are preventing a NATURAL price point from coming and that they're both wrong. Amazon wants publishers to swallow Amazon's losses to keep prices artificially low, and the Big 5 are trying to keep them artificially high, possibly to ward off e-book buyers, but mostly to cover the waste, incompetence, narrow mindedness, and poor business decisions within their own industry.

  6. We need publisher. I love how self-publishing say all author's should self-publisher. This want author's should do first try agents. If you can't get agents. Then go to that midsize publisher like a bean books. Then go to small publisher like Tachyon Publications. The you should find Micro-publisher. Then you Should self-publisher.

  7. Furious -- Fair enough. Although most of the coverage I see indicates Amazon wants to sell at a $9.99 price point. I do think that's the natural, or pretty close to it.

    Kevin -- Depends on what your goal is. There's a generational thing where some feel the book is only 'real' is it has a publisher putting it out. If you just want the most money, though, for most people that's probably to go the self-publishing route. Joe Konrath's blog features a lot of articles supporting that contention.

  8. Joe konrath do like small press. Do you know there small publisher company that pay 60%royalty. self-publishing is good idea for David Webb. Most self-publisher do not make money. But if you are publisher by company there take the loss. Ps go here please only self-publisher as the last result. If you self-publisher you go direct to Amazon and Barnes and Noble, iBookStore don't use smashwords or D2D. There not good for silf-publisher but are good for small publisher.

  9. I have just downloaded iStripper, so I can have the best virtual strippers on my desktop.