Amazon Asks Authors to Spam Hachette CEO

THIS JUST CAME IN

Email from amazon KDP asking authors to take their side and email Hachette. Email gave out Hachette CEO, Michael Pietsch email, and even included points that we should address in the email. How thoughtful of them….

Now there is nothing in the email footer or header that says it’s confidential but I probably won’t repost the entire email because I’m sure there’s some catch and I do not want to be sued.  BUT here are a few selections from it anyway

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….

another snippet

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… 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. 

More longwinded TLDR

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…

We’d like your help. Please email Hachette and copy us.
Hachette CEO, Michael Pietsch: M*********@hbgusa.com
Copy us at: readers-united@amazon.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.

I have to say, I did not expect to get this sort of email from Amazon.  While I like spending less out of my pocket, I’d hate to see the effects this will all have in a few years.  Amazon may become be all end all for books.

Amazon Turning Authors Against Hachette

The very public Amazon vs. Hachette dispute is like hopping in a time machine and being dropped off in high school during class elections.  The companies are the two popular kids trying to convince everyone to vote for them because their opponent is mean greedy bully who just wants to take your lunch money. 

Everyone grabbed their popcorn and watched as the fight has left the school hallways and spilled into the streets.  But after several months of back and forth and input from authors and the Authors Guild the situation has become like two third graders arguing “no you! No, you!” repeatedly waiting for the other to give up.

Amazon.com

But the big question that is probably on everyone’s mind? Should I care? Well, yes! Duh.  What are they arguing over? What everyone argues over, money, specifically eBook money.  Negotiations started in January of 2014 as their contract was nearing an end.  Emma Cueto sums things up nicely over at Bustle, “The assumption in the industry is that Amazon wants the power to discount Hachette eBooks whenever they want — essentially setting the price for these books at whatever number it wants — which Hachette doesn’t want for obvious reasons. Amazon probably also wants Hachette to pay more for “co-op,” which is like advertising money that publishers pay to retailers so that the retailers will spotlight a book on their website or in their store. Hachette, naturally, doesn’t want to pay more.”

In a strange move according to Publishers Weekly, VP of Kindle content David Naggar reportedly sent a letter to literary agents, president of the Authors Guild, and Hachette authors proposing that Amazon and Hachette “forgo all revenue on e-books sold through Amazon and, instead, give them directly to the authors.”  It sounds good on the surface but it’s a passive-aggressive move to turn authors against the publisher and ultimately destroy Hachette leaving Amazon to pick up the remains like a hyena.  Of course Hachette responded in snarky schoolgirl fashion.  Amazon returned with “nanny nanny boo boo,” and claims that Hachette can afford the proposal, as it is a part of a huge conglomerate.

Is Hachette a huge publisher? Yes.  Is it part of a larger corporation? Yes. But one business in a corporation cannot simply take money from another to supplement a bad deal.  Hachette is a publishing company and Amazon is a retailer.  Hachette makes money from print and eBook Amazon makes its money from books, MP3s, DVDs, clothing, jewelry etc. Amazon controls 50% of U.S. book sales and still has existing deals with other publishing houses. They can certainly afford Naggar’s proposed offer, though he knew it would not be acceptable and would never have to follow through, Hachette cannot long term. 

Print books are becoming far too rare and eBooks continue to grow.  If Hachette were to give up profits from Amazon sales they would be extremely limited in the ways they can makeup for that income.  It would just be a matter of time before Amazon’s deal left them broke.  But that’s what they really want isn’t it?

It’s no wonder HarperCollins decided to add print books and audio books to its website for direct sales. If it works out perhaps they won’t renew contracts with Amazon.

Amazon Dodges Lawsuit from Ill Prepared Indie Booksellers

You may or may not have heard about the lawsuit against Amazon and the big Publishing houses.  I'm leaning towards not but that's ok because I'm going to tell you a little about it right.

Some whack-a-doodle indie booksellers decided to right the good fight and sue Amazon and six big publishing companies alleging that " by signing agreements that call for the use of DRM on e-books sold through the Kindle, the online retailer and the publishers have combined to restrict the sale of e-books."  According to Jim Milliot at Publishers Weekly the complaint was filed in the U.S. District Court for the Southern District of New York and stated that Amazon and the Publishers (Harper Collins, Simon & Schuster, Penguin Random House, Hachette Book Group, and Macmillan) signed contracts for the sale of ebooks with DRM that was,  "specifically designed to limit the use of digital content" to Kindle devices.

Makes sense right?  Looking at the ebook market and deals with publishers I could see how one would jump to that conclusion.  However, to go as far as to take the matter to court they must have had indisputable proof.  A Recording of a shady backroom conversation between the big guys making deals that would screw over the independents.  But apparently not.

Federal Judge Jed Rakoff dismissed the claim that the Big Six and Amazon conspired to keep independent competition from selling ebooks.  

As stated in his ruling via GalleyCat:

"The evasiveness of this allegation is remarkable.  Plaintiffs do not allege an unlawful agreement, only vague ‘oral discussions or agreements regarding the use of restrictive DRM.’  Plaintiffs do not even allege that any such discussions or agreements actually occurred, only that they may have occurred.  And plaintiffs do not specify who participated in these hypothetical discussions or agreements, only that they may have involved ‘one or more’ of the Publishers and Amazon."

That's right.  They went to court without a shred of evidence.  Nothing.  How did it even get this far with just accusations?  Seems the judge really had no choice but to dismiss.  As an independent I'd have liked to support their efforts but when you have no proof you lose a lot of credibility.  Maybe they had something that isn't being released or something that was buried by the publishers.  Or maybe the judge was paid off.  Probably not but might make for a decent story.