Wednesday, May 28, 2014

A Lot of Amazon-Hatchette News, A Little Crow

More news comes out about the Amazon-Hatchette title bout and this time Amazon breaks with tradition by speaking out. Amazon has made an offer to Hatchette, but also says that they are not hopeful about Hatchette accepting. The negotiations have been going on since November, so I am not surprised Amazon has that take on things. They would know since they are facing Hatchette across the bargaining table.

Joe Konrath has it all on his blog -- along with a helping of crow.

Take the time to actually click on the links and read other viewpoints. I did and I found them very interesting and enlightening, especially when it came to reading the graph on churn among the Big 5.

Author Earnings had this to say about the drop in sales:

"Our focus on Amazon Kindle sales prevents us from seeing any possible corresponding increase of Hachette sales at other digital retailers to offset these declines, but we can say that the increase in the average price of Hachette’s e-books is having an effect on sales. It could also be that various Amazon algorithms and recommendation tweaks are contributing to the decreased sales. The big lesson is this: Across the Big-5 publishers, lowering average e-book prices correlated with higher per-title revenue. Increasing e-book prices correlated with lower per-title revenue.

This bears repeating, and it’s a lesson publishers could take from self-published authors: Lower prices means earning more money. We understand that this is counter-intuitive, but our data bears this out. And it’s a truth that many authors have seen for themselves as they experiment with prices. Which raises the question of whether or not publishers would even benefit from control over e-book prices. It could be that the worst thing for Hachette’s bottom line would be to get what they’re asking for in these negotiations."

I found Martin Shepard, co-owner of the Permanent Press, a small literary publisher based in Sag Harbor, NY, to offer an enlightened view about who the New York Times interviewed for their article on May 24. It shines a bright light on what went into the NYT's research.

"Who are the other publishers that are crying out? Hachette, the fourth largest of the five conglomerate publishers (who together , through all their more than a hundred imprints sell  85% percent of the books sold to the general public in America). Eddy and Streitfeld then makes passing reference to a third publisher, Bonnier, based in Germany, known primarily for publishing magazines throughout the Western world and far fewer books. As for the outpouring of social media they cite two of Hachette’s best-selling writers:  James Patterson, a writing factory, who, in 2013, “wrote” 13 Alex Cross thrillers alone, using numerous co-writers, which is why one out of five hardcover books sold bears his name. Though he reportedly earned $80 million dollars last year, he described the confrontation between Amazon and Hachette as “a war.“ The other social media complaint about Amazon came from Nina Laden, who writes and illustrates children’s books."

I knew that James Patterson, a Hatchette author, worked much like James Michener did with his massive tomes, but seeing it verified makes me feel so mcuh better than I did about how many books and stories I write every year. Then again, I do have a full time job -- 2 full times jobs if you count reviewing books -- and cannot write as much as I would like since I'm busy making the money to pay for a roof over my head and food to fuel my continued existence.

Hybrid author, Michael J. Sullivan, throws his 2 cents into the mix and comes up with some good advice for publishers.

"Of course many people wisely point out that Amazon may apply similar pressure to self-published titles, and I have no illusions about the long term prospect of a 70% royalty. But even if Amazon cuts the self-publishing royalty rate in half, they would still be paying twice as much as I get under the current Hachette contract where ebook royalties are split 30% to Amazon, 52.5% to the publisher, and 17.5% to the author.

What do I think should happen? Well first off, publishers have to realize that getting $3 for every $1 that an author makes on ebooks just isn’t fair. Ironically, they are feeling the same pressure from Amazon that they apply to authors—requesting a higher share because they hold a strategic advantage. I’m sure both Amazon and authors look at the publisher’s 52.5% and can’t help but think more should come their way, but unlike Amazon authors are powerless. The big-five publishers are remarkably uniform in paying 25% of net on ebooks, so the author has to either accept that rate or go the route of self-publishing. If I could set the terms, I would suggest 30% to Amazon, 35% to the publishers, and 35% to the author.

What can authors do in such an environment? I suggest we each develop a direct sales channel with our readers. In my Hachette contract, I was able to negotiate the ability to sell signed copies of my print books from my website. Since I buy the books from my publisher at a discount similar to what they receive from bookstores, they get their share. I would love to sell my Hachette ebooks as well, and I would willingly pay my publisher their cut from any money I brought in. I’ve not been successful getting this provision from Hachette, but for my latest novel, Hollow World, I retained the ebook rights, so for that title I sell both ebook and print versions. The problem is readers don’t know I sell directly, but if this became more common, it would solve any disruptions when the publisher and retailer are battling."

A hybrid author keeps some of his rights, like digital publishing, while selling some rights to publishers. Digital Book World offers a good explanation.  Amanda Hocking is also a hybrid author. When it comes down to it, I think more authors will go hybrid in the future - or at least they should since they retain more control over pricing and and discounts.

Whatever happens between Amazon and Hatchette in their contract negotiations, please keep in mind that Amazon is not the only game in town. It's the fastest and easiest game, but even Amazon suggests buying from third party sellers and going to other bookstores for your favorite author fix. If price is a concern, learn patience and explore other books that are available. It's one way to expand your horizons and find new authors to love and read.

And don't forget to catch Joe's meal of crow. He eats it with consummate grace and humor. 

"If you missed me saying it earlier, I was wrong. I'd still like to get more data confirming that, but if Amazon and Macmillan did compensate authors, I leaped to a lazy conclusion in my haste to chastise a publisher, and I apologize for that and am grateful someone corrected me. Good going, Macmillan, for taking care of your authors.

And to my many detractors, crow sort of tastes like chicken. Humble chicken. I don't have a problem admitting when I'm wrong."

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