Monthly Archives: February 2010

Weather Advisory

February 10, 2010. Authors, it’s snowing!  Do you know where your buy buttons are?  Are you sure?  Buy buttons go missing without notice more often than you know (read Buy-Button Removal Chronology).  Make sure your buy button is snug and warm at your book’s page at Amazon.  Sign up for your free account at whomovedmybuybutton.com.  We’ll alert you if your buy button takes a powder, whatever the weather.

Not certain whether your buy button’s gone missing?  We can help. See Buy-Buttonology: A Field Guide to Amazon’s Book Pages.

Keeping an eye on our friends at Amazon since last Friday.

 

 

Guild Launches Who Moved My Buy Button? Website

February 5, 2010. The Authors Guild is pleased to announce the launch of WhoMovedMyBuyButton.com, which is now live in fully-functional beta form.  Who Moved My Buy Button? allows authors to keep track of whether Amazon has removed the “buy buttons” from any of their books.

Simply register the ISBN of any books you’d like monitored, and our web tool will check daily to make sure your buy buttons are safe and sound.  If there’s a problem, we’ll e-mail you an alert.

Although we’ve launched WhoMovedMyBuyButton.com in response to Amazon’s wholesale removal of buy buttons from Macmillan titles, we believe Amazon should be monitored for years to come.  Amazon’s developed quite a fondness for employing this draconian tactic (there’s a chronology at the website); it’s only grown bolder with its growing market clout.

Vigilance is called for: sounding off is our best collective defense.  Register your ISBNs today — it’s free and open to all authors, Guild members and not.  (Though we’d prefer you join.)

Here’s a screen shot from the new site:

To RIAA or Not to RIAA, That was the Question

February 5, 2010. As you may be reading in today’s paper, the Justice Department in its filing regarding our settlement with Google continues to see legal problems with the settlement, focusing on class action law but also continuing to raise some antitrust concerns. We disagree with the Justice Department’s reading of the law. At the same time, it’s good to see the Department recognizes the settlement’s many benefits. In our view, it’s best for everyone that out-of-print library books be made available through reasonable, market-based means to readers, students and scholars. Without a settlement, that won’t happen. It’s also best that authors have direct control of the scans that Google has made, with the power to compel Google to hide, display or remove those scans. Without a settlement, authors have no such control. Google’s scanning and use of authors’ books would continue until the lawsuit was finally resolved.

Some authors and authors’ groups have asked why we didn’t press the litigation through to the end. The answer (besides the benefits we saw for authors in creating new markets for out-of-print works), in part, is that copyright litigation is uncertain. Fair use law is complex. One could fill a good-sized law-school classroom with copyright professors who believe that Google’s scanning of your books is a fair use. We don’t agree with that view, but our opinion may not have prevailed. If we’d lost, it would then be open season on scanning of your out-of-print and in-print books. All one would need is a scanner and a friend with a little bit of technical knowledge to start displaying “snippets” at your science fiction, humor, Civil War, or Harry Potter website. All perfectly legal; all without obligation to authors to properly secure those scans. Nothing gets illegal file-sharing going quite so much as millions of unsecured digital works floating around the Internet.

We also could’ve won. That would’ve been sweet. But here’s the thing: copyright victories tend to be Pyrrhic in the digital age. Our settlement negotiations went on with full knowledge of what happened to the music industry. The RIAA (the Recording Industry Association of America) won victory after victory, defeating Napster and Grokster with ground-breaking legal rulings. The RIAA also went after countless individuals, chasing down infringement wherever they could track it down.

It didn’t work. The infringement just moved elsewhere, in unpredictable ways. Nothing seems to drive innovation among copyright pirates as much as a defeat in the courts. That innovation didn’t truly abate until Apple came along with its iPod/iTunes model, making music easily and legally available at a reasonable price. By then, the music industry was devastated.

All that couldn’t happen to the book publishing industry? Sure could. The technologies are out there.

The stakes are even higher for authors than they’ve been for musicians. The ace in the hole for musicians is that they’re not as dependent on copyright as book authors are. Music is a performing art: people buy tickets to see musicians. Writing is decidedly not a performing art. Nearly all authors give away their performances, through book tours and readings, and are glad for any audience they can find. For most authors, markets created by copyright are all we’ve got.

Protecting authors’ interests has always been our top priority: in this case a timely harnessing of Google was the best way to do it.

Macmillan E-Royalties at 25%

February 4, 2010. In a letter just released by John Sargent, CEO of Macmillan, Sargent makes reference to discussions with the Authors Guild over Macmillan’s e-book royalty structure. As you know, we criticized Macmillan in October over its proposed new e-book royalty rate of 20% of receipts.

In our discussions, Sargent agreed to "be flexible" on e-royalty rates, since current industry standards provide a royalty of 25% of receipts. The signal was quite clear that 25% was there for the asking. In further discussions on Monday, Sargent confirmed that Macmillan’s standard e-book royalty would be 25% of receipts under their new boilerplate contract.

As we’ve said before, we believe that 25% of receipts is a transitional royalty rate for e-books. From our December 15 e-mail alert on Random House’s retroactive rights grab:

"Authors and publishers have traditionally split the proceeds from book sales. Most sublicenses, for example, provide for a 50/50 split of proceeds, and the standard trade book royalty of 15% of the hardcover retail price, back in the days that industry standard was established, represented about 50% of the net proceeds of the sale of the book. We’re confident that the current practice of paying 25% of net on e-books will not, in the long run, prevail. Savvy agents are well aware of this. The only reason e-book royalty rates are so low right now is that so little attention has been paid to them:  sales were simply too low to scrap over. That’s beginning to change… [W]e strongly suspect that e-royalty rates are at a low-water mark."

That said, Macmillan’s e-book royalty rate is now similar to that of other major publishers. We look forward to continuing to discuss with Macmillan other provisions of its proposed new contract.

His open letter is below.

————-

To: Macmillan Authors and Illustrators
cc: Literary Agents
From: John Sargent

I am sorry I have been silent since Saturday. We have been in constant discussions with Amazon since then. Things have moved far enough that hopefully this is the last time I will be writing to you on this subject.

Over the last few years we have been deeply concerned about the pricing of electronic books. That pricing, combined with the traditional business model we were using, was creating a  market that we believe was fundamentally unbalanced. In the last three weeks, from a standing start we have moved to a new business model. We will make less money on the sale of e books, but we will have a stable and rational market. To repeat myself from last Sunday’s letter, we will now have a business model that will ensure our intellectual property will be available digitally through many channels, at a price that is both fair to the consumer and that allows those who create and publish it to be fairly compensated.

We have also started discussions with all our other partners in the digital book world. While there is still lots of work to be done, they have all agreed to move to the agency model.

And now on to royalties. Three or four weeks ago, we began discussions with the Author’s Guild on their concerns about our new royalty terms. We indicated then that we would be flexible and that we were prepared to move to a higher rate for digital books. In ongoing discussions with our major agents at the beginning of this week, we began informing them of our new terms. The change to an agency model will bring about yet another round of discussion on royalties, and we look forward to solving this next step in the puzzle with you.

A word about Amazon. This has been a very difficult time. Many of you are wondering what has taken so long for Amazon and Macmillan to reach a conclusion. I want to assure you that Amazon has been working very, very hard and always in good faith to find a way forward with us. Though we do not always agree, I remain full of admiration and respect for them. Both of us look forward to being back in business as usual.

And a salute to the bricks and mortar retailers who sell your books in their stores and on their related websites. Their support for you, and us, has been remarkable over the last week. From large chains to small independents, they committed to working harder than ever to help your books find your readers.

Lastly, my deepest thanks to you, our authors and illustrators. Macmillan and Amazon as corporations had our differences that needed to be resolved. You are the ones whose books lost their buy buttons. And yet you have continued to be terrifically supportive of us and of what we are trying to accomplish. It is a great joy to be your publisher.

I cannot tell you when we will resume business as usual with Amazon, and needless to say I can promise nothing on the buy buttons. You can tell by the tone of this letter though that I feel the time is getting near to hand.

All best,
John

The Right Battle at the Right Time

February 2, 2010. Macmillan’s current fight with Amazon over e-book business models is a necessary one for the industry. The stakes are high, particularly for Macmillan authors. In a squabble over e-books, Amazon quickly and pre-emptively escalated matters by removing the buy buttons from all Macmillan titles (with some exceptions for scholarly and educational books), in all editions, including all physical book editions. Thousands of authors and titles are affected; hardest and most unfairly hit are authors with new books published by Macmillan that are in their prime sales period.

Yet if Macmillan prevails, the eventual payoff for its authors (and all authors, if a successful result ripples through the industry) is likely to be significant and lasting.

For those of you who may have missed it, here’s the story so far:

Last Thursday, Macmillan CEO John Sargent informed Amazon that beginning in March, it would offer Amazon access to a full range of e-book titles only if Amazon were willing to sell books on an “agency” model that would pay Amazon 30% of e-book proceeds and allow Macmillan to set its own retail price for e-books. (Currently, Amazon buys e-books as a reseller at a discount of 50% off the retail list price and sells at the price it chooses.) Macmillan’s price under its agency model, in many cases, would be higher than the $9.99 ceiling that Amazon has been seeking to impose on the industry.

If Amazon didn’t find the agency model acceptable, Sargent said Macmillan would expand its “windowing” of e-book editions. “Windowing” is the practice of waiting until a particular edition of a new book has been on the market for a while before making cheaper editions available. Publishers have for decades waited until the hardcover sales window has closed before opening the sales window on paperback editions, for example. This helps protect the sales channels for hardcover books. Windowing e-books is similarly believed to help protect a publisher’s sales channels for physical books. The risk with windowing is that some owners of e-book devices are angered that low-priced e-book editions aren’t available as soon as books are released in hardcover form.

This was a bold move by Macmillan. Amazon has a well-deserved reputation for playing hardball. When it doesn’t get its way with publishers, Amazon tends to start removing “buy buttons” from the publisher’s titles. It’s a harsh tactic, by which Amazon uses its dominance of online bookselling to punish publishers who fail to fall in line with Amazon’s business plans. Collateral damage in these scuffles, of course, are authors and readers. Authors lose their access to millions of readers who shop at Amazon; readers find some of their favorite authors’ works unavailable. Generally, the ending is not a good one for the publisher or its authors — Amazon’s hold on the industry, controlling an estimated 75% of online trade book print sales in the U.S., is too strong for a publisher to withstand. The publisher caves, and yet more industry revenues are diverted to Amazon. This isn’t good for those who care about books. Without a healthy ecosystem in publishing, one in which authors and publishers are fairly compensated for their work, the quality and variety of books available to readers will inevitably suffer.

Macmillan’s move is timely because, at the moment, the e-book market is still far smaller than the physical book market, but the e-book market is growing quickly. The longer Macmillan waited, the more difficult the transition.

Amazon didn’t wait for March, when Macmillan’s new policy is slated to go into effect; it decided to hit Macmillan immediately and comprehensively, removing the buy buttons for nearly all Macmillan titles, in all editions. This is a direct attempt to use its clout in the physical book industry to enforce its business model in the e-book industry. In some ways, it was an unusual exercise of power for Amazon. The company has used the tactic of turning off buy buttons on several occasions before, but, with major publishers it’s usually selective, and doesn’t turn out the lights on nearly all titles. That treatment is reserved for smaller publishers. (Authors receive no advance warning of Amazon’s treatment of their titles, nor can they do anything about it.)

Amazon, it appears, overreached. Macmillan was a bit too big a foe, and Amazon’s bullying tactics were a bit too blatant. (For a flavor of media reaction, see this story in Fast Company.)

Sunday evening, Amazon announced that it would have to “capitulate” to Macmillan, “because Macmillan has a monopoly over its own titles.” (By this definition, nearly every company exercises a monopoly over its products.) We’re all still waiting for that capitulation: Macmillan’s books still weren’t available on Amazon on Monday evening.

If Macmillan does indeed prevail, the economics of authorship in the digital age are likely to improve considerably. We may go through some rough stretches to get there, however.

You’ll be hearing more from us on this matter soon.