Late last night, Amazon unveiled a letter in response to the 900+ authors who have united against the company and its ongoing commercial dispute with publisher Hachette.
The Amazon vs Hachette feud is getting just plain crazy. Last night, Amazon sent a rambling, very bizarre email to a bunch of self-published authors and it reads like a screed from a sincere (and sincerely crazy) ex boyfriend posting on some weird listserv. It involves World War II, George Orwell, a pseudo grassroots mail campaign and shady corporate math.
The feud is getting uglier by the day and Amazon is continuously trying to shoe-horn it's way into looking like the Good Guy here. They want to lower prices for all e-books because they're SO magnanimous. They're a fucking store and they only care about themselves. If they wanted to take care of readers and authors, they wouldn't take away the ability to purchase Hachette books (which includes Orbit, a GREAT SFF publisher) from the website. A huge number of Hachette books still say they take 2-3 weeks to be shipped. In retaliation, Hachette has opened their own online marketplace and even Barnes & Noble have run deals on Hachette books in stores, pledging to keep their backlist stocked.
Amazon's letter is more than likely a response to the full page ad taken out by over 900 authors in the New York Times, accusing Amazon of being a shady fuck trying to strong arm a publisher into bending to their will. The ad itself was a response to a letter Amazon posted on it's Books blog claiming it wanted to cut Hachette completely out of the equation and shower untold riches and revenues directly on authors themselves, something that is basically impossible and shows that Amazon doesn't know the first thing about publishing.
Having failed with authors, Amazon tries to rally readers, without acknowledging previous criticisms of their points: http://t.co/lhuAO2Axzx
— John Scalzi (@scalzi) August 9, 2014
This isn't the first letter Amazon has written, it's just the most desperate and insane (and it probably isn't the last). Amazon looks increasingly like a giant asshole who is scooping up their toys and leaving the sandbox while screaming and carrying on about how they're just trying to help.
Is Hachette blameless? Eh. They were accused and convicted of price fixing with the iTunes bookstore. Neither company has entirely clean hands. Amazon is wasting an absolute ton of good will on their crusade against them, though. Am I thinking twice about ordering from Amazon? You bet.
Now Amazon wants self-published authors and readers to do their dirty work for them, asking them to send letters to the CEO of Hachette and demanding to know why they won't acquiesce to Amazon's demands. Fucking excuse me?
I'm going to post their latest missive below. For further reading, I suggest checking out Matt Wallace's Dissecting Propaganda for Fun & Profit: The Amazon Letter, Chuck Wendig's In Which Amazon Calls You To Defend the Realm and John Scalzi's Amazon Gets Increasingly Nervous. These are all authors with incredible insights into what is going on and how truly bananapants, batshit crazy it's all becoming.
If you haven't read the note, well. You have quite an experience in your future.
— Maureen Johnson (@maureenjohnson) August 9, 2014
Dear KDP Author,
Just ahead of World War II, there was a radical invention that shook the foundations of book publishing. It was the paperback book. This was a time when movie tickets cost 10 or 20 cents, and books cost $2.50. The new paperback cost 25 cents – it was ten times cheaper. Readers loved the paperback and millions of copies were sold in just the first year.With it being so inexpensive and with so many more people able to afford to buy and read books, you would think the literary establishment of the day would have celebrated the invention of the paperback, yes? Nope. Instead, they dug in and circled the wagons. They believed low cost paperbacks would destroy literary culture and harm the industry (not to mention their own bank accounts). Many bookstores refused to stock them, and the early paperback publishers had to use unconventional methods of distribution – places like newsstands and drugstores. The famous author George Orwell came out publicly and said about the new paperback format, if "publishers had any sense, they would combine against them and suppress them." Yes, George Orwell was suggesting collusion.Well… history doesn't repeat itself, but it does rhyme.Fast forward to today, and it's the e-book's turn to be opposed by the literary establishment. Amazon and Hachette – a big US publisher and part of a $10 billion media conglomerate – are in the middle of a business dispute about e-books. We want lower e-book prices. Hachette does not. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there's no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market – e-books cannot be resold as used books. E-books can and should be less expensive.Perhaps channeling Orwell's decades old suggestion, Hachette has already been caught illegally colluding with its competitors to raise e-book prices. So far those parties have paid $166 million in penalties and restitution. Colluding with its competitors to raise prices wasn't only illegal, it was also highly disrespectful to Hachette's readers.
The fact is many established incumbents in the industry have taken the position that lower e-book prices will "devalue books" and hurt "Arts and Letters." They're wrong. Just as paperbacks did not destroy book culture despite being ten times cheaper, neither will e-books. On the contrary, paperbacks ended up rejuvenating the book industry and making it stronger. The same will happen with e-books.
Many inside the echo-chamber of the industry often draw the box too small. They think books only compete against books. But in reality, books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.
Moreover, e-books are highly price elastic. This means that when the price goes down, customers buy much more. We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that the lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that's 74% larger. The pie is simply bigger.
But when a thing has been done a certain way for a long time, resisting change can be a reflexive instinct, and the powerful interests of the status quo are hard to move. It was never in George Orwell's interest to suppress paperback books – he was wrong about that.
And despite what some would have you believe, authors are not united on this issue. When the Authors Guild recently wrote on this, they titled their post: "Amazon-Hachette Debate Yields Diverse Opinions Among Authors" (the comments to this post are worth a read). A petition started by another group of authors and aimed at Hachette, titled "Stop Fighting Low Prices and Fair Wages," garnered over 7,600 signatures. And there are myriad articles and posts, by authors and readers alike, supporting us in our effort to keep prices low and build a healthy reading culture. Author David Gaughran's recent interview is another piece worth reading.
We recognize that writers reasonably want to be left out of a dispute between large companies. Some have suggested that we "just talk." We tried that. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle. We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Then we suggested that authors receive 100% of all sales of their titles until this dispute is resolved. Then we suggested that we would return to normal business operations if Amazon and Hachette's normal share of revenue went to a literacy charity. But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though e-books represent 1% of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle.
We will never give up our fight for reasonable e-book prices. We know making books more affordable is good for book culture. We'd like your help. Please email Hachette and copy us.
Hachette CEO, Michael Pietsch: Michael.Pietsch@hbgusa.com
Copy us at: email@example.com
Please consider including these points:
- We have noted your illegal collusion. Please stop working so hard to overcharge for ebooks. They can and should be less expensive.
- Lowering e-book prices will help – not hurt – the reading culture, just like paperbacks did.
- Stop using your authors as leverage and accept one of Amazon's offers to take them out of the middle.
- Especially if you're an author yourself: Remind them that authors are not united on this issue.
Thanks for your support.
The Amazon Books Team
P.S. You can also find this letter at www.readersunited.com
I mean, the above is basically full-out crazy town. The George Orwell quote is wrong in that context ( and is extra hilarious because Amazon once deleted 1984 from Kindles), the harping about the judgment against Hachette sounds both gleeful and desperate and their math about e-book numbers have been called just plain wrong by a bunch of prominent authors.
Seems to me the Hachette/Amazon fight is less about what ebook prices should be and more about who should have the power to set them .
— Daniel Abraham (@AbrahamHanover) August 9, 2014
This isn't the end of this fight and I'm sure it's bound to get even MORE insane. This is where we are right now. Negotiations between a top publisher and the behemoth that is Amazon have degraded so badly that Amazon is asking readers and self-published authors to cut off their noses to spite their faces and send mislead letters to a CEO. I just can't even.