Publishing’s Ecosystem on the Brink: The Backstory

[Update, February 2, 2012: There have been some comments here and elsewhere questioning the accuracy of a sentence in this blog post that we excerpted from Barry Lynn's "Killing the Competition" Harper's piece. The sentence deals with Amazon's blackout of Macmillan titles in 2010. We found Mr. Lynn's sentence, saying that "Amazon wanted to price ... every e-book of every publisher at $9.99 or less" to be accurate. To our knowledge, that's precisely what Amazon was trying to do. In our post about the buy-button blackout at the time (The Right Battle at the Right Time, two years ago today), we described a "$9.99 ceiling that Amazon has been seeking to impose on the industry." It's true that Amazon did selectively sell some e-books from major publishers at $10 or more, but Amazon's intentions and practices -- in October 2009, for example, Amazon priced a reported 104 of 112 NY Times bestsellers at $9.99 -- seem quite clear.]

Subtlety is out. Bloomberg Businessweek’s January 25th cover shows a book engulfed in flames. The book’s title? “Amazon Wants to Burn the Book Business.” A towering pile of books dominates the front page of Sunday’s NYT Business Section. The pile starts well below the fold (print edition), breaks through the section header at the top of the page, and leans precariously. Books are starting to tumble off. “The Bookstore’s Last Stand,” reads the headline.

These stories capture pretty well the state of book publishing: this appears to be no ordinary, cyclical crisis that future authors and publishers will shrug off. To understand how the book industry got into this predicament, however, a broader perspective may be needed. The cover story of February’s Harper’s Magazine provides that, discussing a fundamental shift in the federal approach to antitrust law that’s affected bookselling and countless other industries. It’s a story that hasn’t previously been told in a major periodical, to our knowledge.

We’ll get to that in a moment. First, let’s set the stage with the other two stories.

Burning Down the Houses

Brad Stone’s Businessweek story discusses Amazon’s campaign to prevent other booksellers from securing a foothold in the booming e-book market and the company’s furious reaction to Random House’s decision last March to adopt agency pricing for e-books, just as five of the other “Big Six” trade publishers had the previous year. (Before agency pricing, Amazon could sell e-books from Big Six publishers at deep discounts, taking losses at a rate that Barnes & Noble could never afford to match. See How Apple Saved Barnes & Noble, Probably for more.)

Mr. Stone writes that after Random House’s March 2011 agency-pricing announcement,

Amazon could no longer run the best play out of its playbook – slash prices and sustain losses in the short term to gain market share over the long term. … “For the first time, a level playing field was going to get forced on Amazon,” says James Gray [of UK bookseller John Smith & Son and formerly of Ingram Content Group]. Amazon execs “were basically spitting blood and nails.”

Amazon’s response to Random House’s move was stunning and swift:

The next month, an Amazon recruiter sent an e-mail to several editors at big publishing houses, looking for someone to launch a new New York-based publishing imprint. “The imprint will be supported with a large budget, and its success will directly impact the success of Amazon’s overall business,” read the e-mail, which was obtained by Bloomberg Businessweek.

Even with a large budget, directly affecting the success of Amazon’s overall business is a tall order for a new publishing imprint. Amazon pulled in well north of $40 billion in revenue last year (final numbers aren’t yet in), dwarfing the combined revenues of the Big Six publishers.

Luring a substantial contingent of bestselling authors away from the Big Six seems the only plausible route for an imprint to affect Amazon’s overall business. Amazon needed someone with a substantial industry pedigree to pull this off. Amazon quickly – in time for last spring’s Book Expo America — landed just the man for the job: Larry Kirshbaum, formerly of Warner Books.

Just three months after Random House’s announcement, Amazon had all but declared war on the six unruly members of its book supply chain. Jeff Bezos had $6 billion in cash, the patience to absorb losses for years, and a former Big Six chief to lead the fight. The long-running behind-the-scenes battle for control of the publishing industry had finally broken into full public view.

Barnes & Noble’s New Role: The Contender

While Amazon directly threatens traditional publishers with its new imprint, it continues to undermine the ecosystem on which book publishers, and most new authors, depend. Julie Bosman describes this well in her NYT article, focusing on the last remaining brick-and-mortar bookseller with nationwide clout:

Without Barnes & Noble, the publishers’ marketing proposition crumbles. The idea that publishers can spot, mold and publicize new talent, then get someone to buy books at prices that actually makes economic sense suddenly seems a reach. …

What publishers count on from bookstores is the browsing effect. Surveys indicate that only a third of the people who step into a bookstore and walk out with a book actually arrived with the specific desire to buy one.

“That display space they have in the store is really one of the most valuable places that exists in this country for communicating to the consumer that a book is a big deal,” said Madeline McIntosh, president of sales, operations and digital for Random House.

Established authors, for the most part, do fine selling through online bookstores. It’s new authors who lose out if browsing in bookstores becomes a thing of the past. Advances for unproven and non-bestselling authors have already plummeted, by all accounts. Literary diversity is at risk.

To understand just how precarious things are, realize that last year’s Borders’ bankruptcy represented an enormous reduction in browsing space, shuttering 650 stores. (B&N has about 700 stores.) One benefit of the loss of Borders should have been a short-term lift to B&N’s 700 stores and the 1,500 or so remaining independent bookstores. B&N’s sales were indeed up in the nine weeks before Christmas, Ms. Bosman reports. How much? Borders’ collapse led to a bounce of just four percent, compared to the prior Christmas. That’s what’s passing for good news in brick-and-mortar bookselling at the moment.

There is a bright spot, however. Barnes & Noble, led by William Lynch, has exceeded all expectations in the past two years with its launch of the Nook. B&N’s 300-member Silicon Valley office, after giving Amazon’s Kindle developers a two-year head start, beat Amazon to the tablet market by fully twelve months, and introduced what’s generally seen as the state-of-the-art e-ink reader, the Nook Simple Touch, eight months ago.

B&N, in other words, has been out-engineering Amazon, and Ms. Bosman’s story is the best account we’ve had of B&N’s efforts. In the process, B&N has seen its e-book market share climb from zero, two Christmases ago, to roughly 27% today.

B&N remains vulnerable, however. The engineering race against Amazon continues, and Amazon has leverage for acquiring content for its Kindle (see Contracts on Fire: Amazon’s Lending Library Mess) that B&N can’t match. And, critically, one tool that should help B&N, our antitrust laws, is instead poised to undo it.

This brings us to an unlikely tale of books, chickens, beer, and a Silicon Valley gentlemen’s agreement.

The Backstory: Amazon, Chicken Processors & Silicon Valley

Harper’s cover art rivals Businessweek’s: an enormous businessman wearing a gray pinstriped suit is preparing to literally eat the competition, a jumbo handful of gray-suited men and women. In the article, “Killing the Competition: How the New Monopolies Are Destroying Open Markets,” (key excerpts at link, full article by subscription) Barry Lynn views the state of book publishing through a different lens.

Mr. Lynn makes the case that Amazon’s dominance isn’t just a story of an industry disrupted by online commerce and digital upheaval, it’s about the abandoning of New Deal era protections of retailers in 1975 (promoted by backers as a means to fight inflation, says Mr. Lynn) and what he portrays as a shift in 1981 in the Justice Department’s interpretation of antitrust law based on “Chicago School” theories of efficiency and consumer welfare. The upshot appears to be that non-consumer markets (business-to-business markets and labor markets) are often insufficiently protected from monopolies.

To a chicken grower, for example, the relevant market isn’t restaurants or household consumers of chicken, it’s the market of chicken processors. Through a variety of machinations, including long-term contracts and the physical placement of processing plants (think baseball, before free agency), chicken growers now routinely have a market of only one processor to sell to.

Chicken growers own their land, buildings, and equipment, and all of the debt and risk that go with them, but these entrepreneurs have no real control over their economic lives. Growers buy their chicks and feed from their poultry processor, for example, and processors often require growers to make new investments in buildings and equipment. The processors, Mr. Lynn seems to suggest, have something much better than mere capital: the economic power to dictate how others use theirs.

It’s not just chicken growers who face constrained markets, Mr. Lynn writes. In free-wheeling Silicon Valley, computer engineers and digital animation workers employed by Apple, Google, Intel, and Pixar, among others, were subject to a secret agreement not to bid on each others’ employees, according to a Justice Department lawsuit filed, and settled, in 2010. (On Friday, former employees of some of the companies filed an antitrust lawsuit in federal court in San Jose based on the Justice Department investigation.)

It’s even hit beer. The 1,750 U.S. microbrewers may appear to operate in a competitive environment, but they nearly all sell through two distributors: ABI and MillerCoors control 90% of the distribution market.

For book publishers, the relevant market isn’t readers (direct sales are few), but booksellers, and Amazon has firm control of bookselling’s online future as it works to undermine bookselling’s remaining brick-and-mortar infrastructure. Amazon controls every growing segment of the industry: online physical books, downloadable audio books, online used books, and e-books. Amazon commands about 75% of the online market for print books, and 60% of the e-book market (a percentage that decreased from Amazon’s reported 90% two years ago, as a result of agency pricing).

Mr. Lynn reports on a conversation with the head of one of the largest publishing houses in the U.S.:

He explained that Amazon was once a “wonderful customer with whom to do business.” As Jeff Bezos’s company became more powerful, however, it changed. “The question is, do you wear your power lightly? … Mr. Bezos has not. He is reckless. He is dangerous.”

The head of a small publishing house in Manhattan, Mr. Lynn reports, was even more blunt:

“Amazon is a bully,” he said, his voice rising, his cheeks flushing. “Anyone who gets that powerful can push people around, and Amazon pushes people around. They do not exercise their power responsibly.”

Neither man allowed me to use his name. Amazon, they made clear, had long since accumulated sufficient influence over their business to ensure that even these most dedicated defenders of the book – and of the First Amendment – dare not speak openly of the company’s predations.

Mr. Lynn then turns to Amazon’s blackout of Macmillan’s buy buttons, two years ago this week:

At the time, Amazon and Macmillan were scrapping over which firm would set the price for Macmillan’s e-books. Amazon wanted to price every Macmillan e-book, and indeed every e-book of every publisher, at $9.99 or less. This scorched-earth tactic, which guaranteed that Amazon lost money on many of the e-books it sold, was designed to cement the online retailer’s dominance in the nascent market. It also had the effect of persuading customers that this deeply discounted price, which publishers considered ruinously low, was the “natural” one for an e-book.

In January 2010, Macmillan at last claimed the right to set the price for each of its own products as it alone saw fit. Amazon resisted this arrangement, known in publishing as the “agency model.” When the two companies deadlocked, Amazon simply turned off the buttons that allowed customers to order Macmillan titles, in both their print and their e-book versions. The reasoning was obvious: the sudden loss of sales, which could amount to a sizable fraction of Macmillan’s total revenue, would soon bring the publisher to heel.

This was not the first time Amazon had used this stratagem. The retailer’s executives had previously cut off small firms such as Ten Speed Press and Melville House Publishing for bucking their will. But the fight with Macmillan was by far the most public of these showdowns.

In the late 1970s, when a single book retailer first captured a 10 percent share of the U.S. market, Congress and the regulatory agencies were swift to react. As the head of the Federal Trade Commission put it: “The First Amendment protects us from the chilling shadow of government interference with the media. But are there comparable dangers if other powerful economic or political institutions assume control…?”

***

Today, … a single private company has captured the ability to dictate terms to the people who publish our books, and hence to the people who write and read our books. It does so by employing the most blatant forms of predatory pricing to destroy its retail competitors. … [It] justifies its exercise of raw power in the same way our economic autocrats always do: it claims that the resulting “efficiencies” will serve the interests of the consumer.

The book industry is in play, and has been for a while. The good news is that people are finally starting to pay attention.

Comments: more
  • Toledojericho

    ano naman

  • Raygeaney

    Without Barnes and Noble Amazon would almost have the market to its own … competition is always great, I found success with both, in putting my eBook ‘The Irish Honesr Liar’ (set in Ireland) on both the Nook and Kindle.
    Happy St. Patricks Day to all.

  • Successful Author

    I’m an author. Agents don’t want my books. Publishers don’t want my books. The Authors Guild doesn’t want me because the publishers don’t want me.

    Amazon welcomed me as an independent author, and  62,000 sales indicate customers want my books. I made $1.95 on each sale at $2.99. That’s $120,000 in my pocket, $64,000 in Amazon’s pocket, and zero in the pockets of agents, publishers, and bookstores.

    You don’t want me in your ecosystem.  I have joined another.

  • Guest

    My heart doesn’t bleed for publishers. It doesn’t bleed for Amazon either. The whole book industry is set up to give a living wage to everyone but the majority of writers who create the stuff they sell to begin with. As far as I am concerned, they all feed off my flesh. But with ebooks, perhaps they will all get their due. The free ebook is rising. Like the music industry, it will consume some of the corruption, and soon amazon won’t be able to make much profit and neither with the publishers. If writers like myself aren’t making money now, we will soon be joined by all the rest. The gatekeepers will be gone and the landscape will be changed. I can’t say it will be better, but it won’t matter much to me economically. And I will be able to publish myself with very little investment and send my words into the world. The old model just didn’t work for me, so why should I care if it goes up in flames?

  • http://www.facebook.com/LucyM121 Lucy Merriman

    But isn’t the upside of all this that self-published novelists have been doing much better? It used to be that self-publication was thought of as a joke. Now it’s being taken very seriously, especially with great success stories like Darcie Chan and Tim Anderson. Being self-published, they had no problem with Amazon’s low pricetag, since all the profit went to themselves. 

    I know a lot of “indie” writers who’ve self-published, for better or worse, and done probably just as well as they would’ve with a small press. If Amazon didn’t host the work of indie writers, there’d be no way for them to get their stuff out there. 

  • pcc

    I work for a B&N, have for almost a decade and watched the world change.  Do any of you have any idea how heartbreaking it is to spend 10-30 minutes with a customer trying to help them find the perfect title only for when you tell them you don’t have it that you can order it for them, they say they will just check Amazon.  I’ve done all the foot work and customer service for them that Amazon doesn’t offer and Amazon get the sell, and I, or my fellow booksellers, get hours cut off of a shift later because the store hasn’t made enough money that day giving us less time to refill displays that are selling, put out new product, and straighten shelves so the product can be found.  This was not an issue 8 years ago.

    If B&N falls, customers will lose a lot more than they think.  We may not able to carry every single book that has ever been in print in our stores (though some customers have a hard time understanding this) but we can order almost every title still in print (even if it is now what is called Print on Demand in which case the publisher only prints the book if they know there is someone specifically asking for it).  What customers do lose is 1-1 customer support, and believe it or not we try to do the best we can for that.  Can we read every book in the store, no, but we work to have  as much knowledge as possible.  However if things continue, soon all you’ll have is an information terminal you have to use yourself with out assistance to navigate to find where a section is an how it is organized (usually by author but not always) and person at a register to ring you up and someone later to re-shelve the non purchased book and shelve books that just came in.  Not to mention a large percentage of our ebook customers still like to come in and browse a book and flip through its pages before deciding to buy it and maybe have a cup of coffee while they do this.  In addition, parents like to bring their kids in to let them look at books why they chat and have a cup of coffee.  All Amazon does is provide books cheaper with self-checkout little or no customer services and and the only expense they have is maintaining a warehouse and a website (not many paychecks there) and they are still not making money off the books.

    So all I ask is that people stop immediately thinking Amazon is the only place they can order a book and start thinking about what they will be losing if we are no longer around to help them.  I know my career with B&N is nearly at an end because I finally finished my education and am now looking to move on, but I know a lot of wonderful people who put the customer first and really care about the customer finding just the right book who will lose their jobs if the trends continue.

    • Guest

      I used to order books from B&N but their online customer service and shopping experience stunk so I moved to ordering from Amazon. As for customers coming back to the store, consider that a lot of people may not live all that close to a store and thus it’s difficult for them to come back to pick up a book. I, for one, live 45 minutes away from a B&N. I still buy a few books from B&N, when I get paper which is increasingly rare. I prefer Amazon’s ebook customer experience to Nook and iBooks.

    • Katmarie C.

      Well for four years I had a dream job at a wonderful indie bookstore where I worked as hard as you did to help customers find a great book only to one day have them start walking out the door to go to the new B&N so they could have a coffee and cookie while reading.  The two indie bookstores in my town co-existed just fine with Amazon.  It was B&N that put us both out of business.

  • Anonymous

    Oh, go cry me a river.

    Literary diversity?  From The Big Six??   You’ve got to be joking.

    Let’s see what the Big Six offers:  sharecropper novels, racial-stereotype-identity novel/memoir of the week, and a curiously self-inflated sense of its own taste and intellectual capacity (c.f. comments below).  The Big Six arrogates its place as gatekeepers; meanwhile, the “slush pile” (what an endearing term of condescension) generally involves a one-year wait simply to obtain a response.

    And this is a business model for the 21st century?
    Allow yet another of the hoi polloi to declare:  not only is Bezos going to eat your lunch, but I will be one amongst the million mob to stand back and golf-clap while he does so.  Meanwhile, my casual-reading cash has involved a number of novels, not one of which sold for more than 5 bucks… usually first novels… all of them on a Kindle.

    And you know what?  Many of them have all the originality and diversity the Big Six claims it’s looking for.  As a consumer, the Big Six is simply no longer relevant to my life.

    • Zaty

      You lose any credibility to critique their condescension two paragraphs before you attempt to do so.

  • http://profiles.google.com/edward.w.bear Edward Bear

    I may buy from B&N rather than Amazon, but that doesn’t mean they’re a contender. They are, in fact, doing a lousy job of pushing ebooks.

    1. The search engine sucks. Try entering “Manta’s Gift” (in quotes) and get every thing but the book, even though what you entered was the [beep] TITLE.

    2. No shopping cart for eBooks. You have to buy each book separately, even if there are several books you may want. My credit card locked up on book 3 of 5 in the Percy Jackson series because so many transactions so quickly was “suspicious.”

    3. No engagement with the buyers. B&N bought fictionwise, where I’ve been a customer since 2000, and learned *nothing* from them. Fictionwise had a feature where you could ask to be notified when a new book by author (x) was available. Instead, all you get from B&N is advertisements pushing the books THEY want you to buy, not the books YOU want to buy.

    Amazon’s going to end up being both a near-monopsony to the publishers and a near-monopoly to book readers, if only because the publishers are so insistent on cutting their own throats with lousy pricing, lousy availability of formats, and the usual sloppy inconvenience of DRM.

    Then the Dread Pirate Bezos will REALLY be able to put the screws on.

  • Dadosarous

    I agree with the above concerns, but there is also the fact that Amazon for the most part gets an additional benefit and states take a tremendous loss in revenues by the fact that Amazom is not required to collect sales tax.  E commerce as a whole has benefitted from this to the detriment of local brick and mortar stores.

  • Andrew

    I commented earlier, my main thrust being that Amazon may well have monopolistic practices that hurt traditional book publishers but the existence of e-books themselves is not in principle the evil that will put the publishers out of business or ruin books.  The publishers themselves are the greatest danger to themselves, with underdeveloped management thinking, out-moded sales networks and a healthy disdain for the general readers’ needs and desires.

    How soon we forget the Net Book Agreement where publishers exercised monopolistic practices to prevent bookshops selling any titles at a discount.  How soon we forget the territorial rights contracts that prevented authors from gaining a per copy royalty from foreign sales.  How soon we forget that the agents’ cosy relationship with publishers meant that sometimes more than 20% of author’s royalties were levied simply so that a foreign territory agent’s could dip his or her nose into the trough. How soon we forget the cosy relationships publishers had with the reviewer system, making use of their own authors to favourably review their publications in periodicals where they had a controlling interest in or where they featured highly in the advertising revenue of those peridocals. There is much wrong with the traditional book publisher’s relationship with authors let alone it’s relationship with book sellers. The idea that publishers have to send sales agents around the countryside to sell books to book shops is an outmoded system.  Whereas, book publishers could really gain from the internet.  Selling both hard copies with added value and electronic versions, creating more valuable social networks that talk about books in a more trusted way. I can easily see a social system of traded copies at say pennies per time, most of which goes to the author, just like the Lending rights of libraries, and run by publishers to the benefit of all. Amazon does not have to be the only seller on the block. Indeed, if publishers play their cards right, Amazon could end up with all the cheap dross while the good stuff stays within the publishers’ networks.  But the publishers’ management seems to be behaving like dinosaurs. More fool them. 

  • Annette Sandoval

    Thank you Amazon for having  the huevos rancheros to give my book a shot!

    Until last month, every responding publisher that I pitched my book to
    had passed it along to the in-house editor with a Hispanic surname. Slightly miffed, I went along. When
    I didn’t hear back I shot the Latina editors an email. The one who got back to me said, ‘It doesn’t have mass-market appeal.’

    I could not believe that a novel about an office drone, who thinks
    her boss is a serial killer, wasn’t worth a read?

    Discouraged and super-bummed, I went ahead and submitted the manuscript to Amazon Publishing. It was my last hope… seriously.

    Lo and behold, Amazon found my book refreshing! I can’t tell you how relieved I am  to find an editor who doesn’t  think that all Latina fiction
    is all about women flipping tortillas, making the sign of the cross, or
    hopping a
    fence.

     

    • http://www.susanzakin.com/blog Susan Zakin

      right on.  

    • Agabrielw

       How did you get publishers to consider your book without a literary agent?

  • http://members.authorsguild.net/stangib Stangibilisco

    As for Amazon reviews, here’s a great one that somebody wrote a few years ago about “Teach Yourself Electricity and Electronics — 3rd Edition”:

    http://www.amazon.com/Teach-Yourself-Electricity-Electronics-Gibilisco/product-reviews/0071377301/ref=cm_cr_pr_viewpnt_sr_1?ie=UTF8&showViewpoints=0&filterBy=addOneStar

    Now, if only I had titled the book “Teach Yourself Satanic Electricity and Electronics,” I’d have long sincen joined the one-percent club.

    In any case, they can hardly hold a flame to the winner of all time, the great review of reviews, a true landmark in criticism (Anonymous No. 1):

    http://www.barnesandnoble.com/w/understanding-einsteins-theories-of-relativity-stan-gibilisco/1018193964?ean=9780486266596&itm=28&usri=stan+gibilisco 

    Stupidity and the speed of light. And it’s been up there on the site for nearly a decade. I just can’t bring myself to try to have it taken down.

    Welcome to the brave new literary world.

  • http://twitter.com/JoniRodgers Joni Rodgers

    Not sure why my response was deleted, but here’s what it said: http://jonirodgers.blogspot.com/2012/02/my-response-to-publishing-ecosystem-on.html

  • Anonymous

    The canary in the coal mine re. Amazon’s paradigm shifting of the book industry was the development of an Amazon review “community” (Amazon’s term), allowed to develop without the discipline of standards and editorial safeguards demanded by the marketing of intellectual product. The problem as it gains critical mass: in the old environment of critical consideration of books, editorial standards could be counted on in the process, though subject like anything else to politics and agendas; that environment has been replaced by the Amazon model that puts token editorial controls on material that is increasingly generated by marketers and those with other agendas. As an author, I can buy a five star review for my book for $5, or I can hire a marketing company to play the Amazon game in more subtle ways, or I can conduct whatever competition or vendetta against other authors I may wish. Amazon is aware that they’ve lost control of the process, but recent efforts on their part to pull it back from the brink of chaos have mostly been met by a cynicism in keeping with the response to other aspects of Amazon’s role in the publishing business. The corruption of the Amazon review community, starting several years ago, predicted the uncharted waters of the Amazon we are dealing with now. The Author’s Guild, for one, has never responded to the review problem, but at some point it will have to be addressed as perhaps the foundation of the problems (and problems as opportunities) presented to all of us by the Big River.

    • Guest

      You don’t think the Big 6 can buy reviews. They already do so with reviews from places they support like Publisher’s Weekly. Amazon isn’t practicing any evils that publishers themselves haven’t done in the past.

      • Anonymous

        The PW model was a mostly transparent practice in the business of publishing books. The Amazon model was designed to give power back to the people so to speak, but it’s been taken over by a less transparent and cheaper – even free – version of the PW model. Most people, buyers, libraries, etc. understood the PW mechanism; most people can be manipulated by the Amazon model. Amazon needs to step out in front of the problem, and exert some leadership in giving the power back to the people, or at least in restoring integrity to the online consumer review movement, which, if you look around you, seems to be falling into a rabbit hole.

  • Lizabakewell

    All of these comments are fascinating and insightful. I fall on the side that Amazon is using monopoly tactics and these tactics are not good for consumers, the book industry, or the country anymore than the big mega-banks or mega-corporations have been for the country, in recent times. (My own experience with Amazon as an author was nothing but unpleasant). I’m a locavore as much as a loca-buy most of the time. I like to help to keep those in my town and state employed with my few purchases. As for bookstores, I feel the same way. Local needs to stay alive. The other doesn’t have to perish, but it does need controls so business is fair. As the Tattered Cover in Denver announces above it’s register (a list known to others in other contexts):
     ”Here’s What You Just Did! 1. You supported local jobs & benefits; 2. You kept your tax dollars in Colorado; 3. You favored uniqueness in an increasingly generic marketplace; 4. You endowed a gathering place where readers & writers can share ideas; 5. You fostered the many regional authors and artisans whom we represent; 6. You invested in the local suppliers & manufacturers on whom we rely; 7. You nourished the local charities & organizations with whom we partner; 8. You underwrote the kind of city that attracts new business & tourism; 9. You enriched yourself.” How can you not love that?Tattered Cover is an experience you can’t download!”

  • Jstefcole

    Unfortuntatly we cannot boycott Amazon. The behavior of greed and control on the part of  corporate America has to be understood by the public. That means accepting the inconvenience of actually shopping in real time offline. Diversity is at stake in all areas form the hardware stores eaten up by Home Depot to the stationary store swallowed whole by Staples and the local coffee shop by Starbucks.  Prepackaged generic big box products to crushing one stop book selling online.  It is up to us as consumers to break out  of the corporate dictatorship mould and support small businesses and individual thinking.  Get offline and back into the shops; especially the indie book marts: browse, sample and think for yourslef.

  • http://www.janwhitaker.net/ Jan Whitaker

    I cannot maintain, even for five minutes, a single coherent position on all the changes taking place in publishing and bookselling. I feel both a sense of loss — of independent bookstores and serious reviews in newspapers  — and a sense of gain — more readers who never shopped in indie stores but who like the instant gratification of downloading books. I think Amazon has engaged in bullying, but that doesn’t make publishers saints either — they have never been protectors of writers’ best interests.

    As a writer I believe I’ve gained from Amazon’s existence, and as a consumer I know I have. I buy academic books and specialized topics and I’d be spending all my time waiting weeks for special orders if I bought them from my local bookstore. Sad but true.

    Maybe worse than an overly powerful Amazon would be the day that Amazon decided to drop book selling altogether!

    There will always be conflicts. Each party involved in the production and sale of a book has their own interests, and always will. Each, particularly individual writers, needs a larger entity to look out for them. Thanks, AG!

  • Ted Gross

    Excellent post though I think that one cannot call blame to Amazon because of the fact that the normative publishers just woke up to the changes in the industry. Amazon had vision. They applied it. They correctly assessed where the market is going. The others sat around and thought their position as Kings could not be touched. Now that Amazon has grown, and in such a way that the publishers cannot live without it, everyone is calling them the “bully”. You have to be kidding me, right? The bullies here were the publishing houses for over 60 years. Anyways I made my views clear on this subject on Cobwebs Of The Mind @ 
    http://teddygross.blogspot.com/2012/02/open-letter-to-barnes-and-noble.html

  • Eyes and Ears Editions

    “It’s new authors who lose out if browsing in bookstores becomes a thing of the past.” That’s where we gagged. Since when do small publishers or new authors find themselves displayed effectively  in chain bookstores? Within a week or two they’re shoved to the back shelves or out the back door, because the bookstores don’t give any time for authors to be discovered.
    And as for the myth of “hand-selling,” even amazon does a better job of referrals. The “produce model” of sales is out and the “long-tail” model allowing quality unknowns/backlists/midlists to be discovered through hyperlinks is in, and it’s largely thanks to amazon. Writers are expected to work in their garrets between their day job shifts, but what we’re hearing here is the loud squawking of Manhattanite middlemen, branded writer-stars, and talent-challenged lit grads who found a cushy landing and are now worried that their Random-House-rent problems will only worsen.

  • http://members.authorsguild.net/stangib Stan Gibilisco

    I am a long-time author of science, technology, and mathematics books for McGraw-Hill. In the past year and a half, I’ve seen my royalty income drop by about 75 percent. I don’t know how much of it comes from Amazon’s activities, how much results from bootlegging (the pirate sites love me), and how much comes from the recession (I have stopped buying books, myself).

    Recently I encouraged my editor, in rather emphatic terms, to consider publishing some of my future work for use on Apple’s ipad. Then I learned that the CEO of McGraw-Hill is, in fact, working toward that very end. I believe that the book publishing business — and especially the textbook publishing business — will undergo a “sea change” in the next few years. I’ve seen students in a class for troubled kids at the local community center, and not a piece of paper, not a pencil, not a blackboard existed in their midst. Nothing but mini-notebooks.

    We can either ride this wave or let it drown us — but I do believe that the choice rests with us. Meanwhile, the Sherman Antitrust Act still holds force, does it not?

  • Cherylktardif

    I’m a published author AND a publisher, and I am very nervous about what the future may hold for my writing and my authors. Amazon has made no secret that they’re striving for a monopoly. With their Select program they’ve asked writers to give them exclusive rights to distribute and sell works. Initially I was skeptical and pissed by their tactics.

    But the bottom line is this: Amazon is a business and in order to run their business they need content. I am a content provider (as an author and as a publisher.) We both want to stay in business. So I have no choice but to jump onto the Amazon train. I’m not putting all my eggs into one basket though. Not all my titles, not my authors’, will be enrolled in KDP Select.

    There has never been a better time for a writer to pursue their craft and get published. We can now make a living instead of pursuing a “starving artist” life. Do I like that Amazon has so much control? No. Are they helping me make more money as a writer? Yes. 

    If you’d like to check out my KDP Select Experiment and see how Amazon has increased my sales, please visit my blog at http://www.cherylktardif.blogspot.com

    Cheryl Kaye Tardif

  • Deborah Edwardson

    I’m one of the writers bought out by the Amazon/Marshall Cavendish deal…and I sold my first novel to FSG/Mamillan. So I am now in the odd position of having two of my publishers fighting with one another. Barnes and Noble? Sorry, they have never been my friend. They would not even sell my book named a National Book Award Finalist.  Maybe I’m naive, but here’s my take:  

    http://wordsfromthetop.blogspot.com/2011/12/im-just-writer-here.html

    • http://www.susanzakin.com/blog Susan Zakin

      Great blog post.  I’m a writer, too, and I’ve gone through my own version of just about everything you’ve described here.  Barnes and Noble?  Weren’t they the bad guys not so long ago?  Old school publishers?  Don’t we all have our own horror story?  Technology is unstoppable, so let’s have some fun with it.  (After all, what choice do we have?)

  • Anonymous

    I worked with a (non-publishing) company that had Amazon as its partner. Every single person at the company was terrified of Amazon. Absolutely TERRIFIED. If the tiniest thing didn’t go exactly right, Amazon would browbeat them and fine them and basically pull their choke chain. I was very pro-Amazon before that, but that soon changed.

  • Joni Sensel

    Can I just say what a pleasure it is to actually read comments online that can disagree while remaining mostly smart, polite, and literate? So unusual. And I’m afraid, both as a reader and as an author, that in a literary environment dominated by ebooks (many of which are self-published by people with no business inflicting their writing on an unwary public), really good books will become equally scarce.

  • http://twitter.com/tedmagnuson Ted Magnuson

    Ebooks vs Bricks and Mortar, ebooks vs Bricks and Mortar, hasn’t anyone gone to the library lately? Talk about renumerating those who toil in the publishing industry, where does the library fit into the ‘life-support for authors’ equation? I just received a copy of ‘Becoming Dickens,’ as my name slowly drifted down from 10th on the waiting list to ‘On hold, Ready for Pick up.’ Let the debate play on, I’m headed for my easy chair, my reading light and reveries about a ‘simpler(?) time and place.

  • Deirdra McAfee

    <> 
    As commenter Evan Gregory notes, readability and coherence are important added values.  Because they were print books before they were  e-books, those books from major publishers that we read on Kindles and Nooks were queried and copyedited by people who knew how.  

    Literature’s having a hard enough time making its way; God save us from the day there’s nobody left but self-published “authors” free of editorial oversight.  

  • Melissa

    While I’m hardly one to sing the praises of Amazon, casting Barnes & Noble as the hero of the publishing story (or, better yet, a victim of these economic times) is laughable. Empowered by its buying power (Barnes & Noble has an 80% market share), B & N has happily turned into the neighborhood bully, carrying only those titles it believes (or has been convinced) will be big sellers. And the indignity goes further. Even if B & N carries a book, unless that book has “reorder” status, it can sell out and disappear from stores without ever being restocked.

    Frightened by B & N’s power, publishers are loathe to aggravate B & N buyers by pushing too heavily for dark horse titles. So the idea that a customer at B & N is truly “browsing” a representative sampling of titles is misinformed at best, and, at worst, runs the risk of making writers and authors who are frustrated with the stores’ tactics feel guilty for not thanking this conglomerate with its eye on the bottom line, not authors. 

    B & N is a as big a bully as Amazon, and it’s time for publishing houses to fight back. If big houses united and refused to let B & N carry its best sellers unless it supports emerging writers, then we might see shelves at its stores really represent the books that are being published. As long as publishers, writers (and, yes, even my beloved authors guild) kow tow to this monster, they’re going to keep pushing all of us around. B & N is frightened of Amazon. Publishers are frightened of B & N. Authors are frightened of publishers.

    Change, people, is not going to come from the top.

  • http://www.facebook.com/profile.php?id=31333 Ira Stoll

    I love publishers, independent booksellers, and Barnes & Noble and want them all to prosper. But from an author’s perspective, one pro-Amazon point that hasn’t been mentioned here yet (so far as I can tel from a quick read of the other commentsl) is that you can become an Amazon affiliate and get 6% or so of all sales you refer to the Amazon site. This means that if you as an author have relationships with a lot of readers and refer the sales to Amazon, you can add about 50% to what your royalties might otherwise be on a trade paperback. That looks like a pretty good deal to me, but maybe I am missing something.

  • Allan Cole

    I wish this kind of energy was being spent by the various writers’ unions going after piracy. For better or worse I make money from Amazon.com. But the pirates are eating me alive. So, while we were all watching the Mega Corporations go at it, we were caught flat-footed when there was finally a proposal before Congress to give us at least a little bit of help – by holding the big search companies responsible. Silicon Valley rose up and smote us across our heads and shoulders and that was the end of that. 

    • Rarefiednight

      If the “proposal before Congress” to “stop piracy” that you refer to is SOPA or PIPA, it is you who is sadly misinformed. It has been shown numerous times that neither of those bills would do anything useful to stop piracy; in fact, they would quite impede the ability of smaller companies and regular people to do most anything.  You’ve got it backwards, my friend – these bills were ones created by the entertainment industry and smote down by the regular people who make the country run.  
      If these were not the bills you were referring to, I apologize. However, I cannot think of any bill similar to the one you describe other than SOPA or PIPA. I do hope you will go and educate yourself about what those bill actually were (and still are) and the horrible effects they would end up having (not to mention the fact that everything would still be easily pirated by those who wanted to and the laws would only catch up regular people who did nothing). Sorry if I have been ranting; this is an issue I feel strongly about.

  • Ellenhopkins

    Something a lot of authors seem to miss sight of is that, should they choose the indie straight to e-book route, they put themselves at risk. Digital content can, and has been, manipulated without the author’s consent. Print books allow a true record of a work as written by an author. I would think more writers would share this concern.

  • Anonymous

    Time for a little history lesson. There are three issues here,
    and they are all relevant to what’s happening now.

    1. In the ’80s the small bookstores got mad at the big
    bookstores via a lawsuit against all the big publishers. They got the Supreme
    Court to side with them on a law: Publishers cannot give one bookstore a
    discount greater than that offered to all bookstores for the same quantity.
    Effect: Establishment of co-op advertising. You want that book face out, you
    pay “advertising,” book in the window? You get the idea. With this single
    decision, little bookstores doomed themselves to effectively smaller margins
    and fewer sales.

    - This single decision gave MORE control to the big publishers
    because the game of books turned into one of distribution and penetration
    (market) instead of content.

     - And content became
    weighted more toward celebrity/platform/author branding to make that
    penetration work.

    2. Distribution was everything, is everything still (for a
    while). When Amazon started on-line sales, they effectively put a bookstore in
    every home, every office, and every portable. Whereas the big publishers
    controlled distribution access (salespeople and co-op advertising clout),
    Amazon were able to boast they had, before their 5th year, over 1 million retail
    outlets.

    3. Discoverability changes with the Internet. Face it, the joy
    of browsing through a bookstore started to fade years ago. Sure, sometimes it
    is just plain fun and rewarding. But what often kills the experience is (like
    the airlines) is ground staff who don’t give a damn. What small book stores
    need to do (as the best ones already do) is make co-op advertising deals with
    publishers based on client time spent looking at books, client time spent
    enjoying the book experience, client satisfaction. Look, if you are a Ford
    dealer, Ford evaluates your customer satisfaction and cuts you a special client
    satisfaction discount to reward you creating good Ford clients. Taschen’s whole
    enterprise is based on this model (although it may be marginal at times). I am
    not saying Random House should open brick-and-mortar stores, but they could
    have “Random’s Corner” in every independent bookstore – and for that customer
    experience, allow the bookstore to float retail pricing to match Amazon (with
    Random taking a hit – but keeping their core business alive).

    And for a final comment: B & N are a great outfit, they know
    books. Part of their problem is that instead of 100,000 new books (as in 1985)
    there are now 500,000 each year. They simply cannot make that model work and
    allow authors some pride of place (or face out titles) unless someone pays them
    to do so. However, B & N could think about their core business, their
    ENTERTAINMENT value as a retail store and better train staff to make the B
    & N experience one not to miss. If they would just value customers the way
    Lexus does, they would see how it can be done. Repeat business is their core,
    but they never act like it. Not one B & N store I have ever frequented has
    ever, never ever, known a customer’s name or even said at check out, “Thank you for your
    purchase Mr. Riva.” Bricks and mortar is ALL about human contact.

    • http://www.susanzakin.com/blog Susan Zakin

      Great comments.  But I don’t think Barnes and Noble can ever duplicate the indie bookstore experience.  Apart from truly high quality boutique stores in urban areas, and the occasional out of the way spot like Marfa, Texas (great bookstore!) isn’t the future some form of online sales/ebooks?  I’m not pimping amazon.  I just think that we’re better off embracing the trend and trying to figure out how we can get on top of it, rather than holding on to a model that seems doomed.  I said this in so many words in a comment above, so I’ll shut up now!  

  • http://twitter.com/coop Mike Cooper

    I’d be interested in real data on how many people are making “a reasonable living” in either traditional or self-publishing.   What numbers are available suggest that the success rate is vanishingly small either way, but smaller for self-pub.  See
    Chance That A Self-Pub E-Book Sells >100,000 Copies = Odds of a Hole in One.

    This result is not surprising.  Ewan Morrison recently made the reasonable point that e-publishing effectively distributes a somewhat larger pie across a far greater number of slices, leaving most with less.  In other words, the long tail is great for Amazon, which accumulates vast profits pennies at a time, and not so great for individual authors, who get the pennies.  See
    The self-epublishing bubble
    .

    As for bookstores, Boston is down to one (a B&N downtown), and Cambridge two (Harvard Books, and the SF/gamer specialty Pandemonium).  Compared to the dozens when I first moved here, that’s remarkable.

    • Pow3

      Cambridge has at least three (not counting used bookstores and not counting Pandemonium):  B&N operated Harvard Coop; Harvard Bookstore and Porter Square Books

      • Maristed

        also MIT Coop– smaller than HU’s and nicely browseable — MIT Press bookstore, Rodney’s in Central Square and other one-of-a-kind gems such as The House of Wisdom (Middle Eastern literature) on Cambridge St.  But i take Mike Cooper’s point.

  • guest

    And the real irony? Amazon is currently cohosting with Penguin the Amazon Breakthrough Novel Award, in which the winner, who would probably have become an indie author, becomes published through one of the big houses. 

    Seems to me that Amazon isn’t quite so invested in screwing over the authors and publishing houses as everyone would believe…

    • http://twitter.com/moonbridgebooks Linda Austin

      Most people can be forced to kneel before the devil if the devil is the only way to stay alive. (See also news about Houghton Mifflin Harcourt’s new “Amazon imprint”.) Amazon hopes to launder its books to the real bookstores via Penguin and HMH and their better connection to Ingrams venerable and discounted distribution system. But, with Amazon taking its cut, I don’t think libraries or real bookstores can ever afford to buy any Amazon-affiliated books, Ingrams discount or not. Amazon Pro for CreateSpace users certainly doesn’t cut it. And what real bookstore with scruples would want to work with Amazon anyway - Amazon wants them to die.

      This is a good article, but it doesn’t cover what Amazon tried to do to LuLu and other pub services companies (a lawsuit ended that), what it’s doing to Lightning Source books since last summer or what it just tried to do to Goodreads (which stuck their fist into Amazon’s big goblin mouth!).

  • http://www.facebook.com/sugarstars Jesse Ellorris

    All of this panic over Barnes and Noble losing browsing privileges is forgetting that a ton of people do their book browsing on the internet. I hardly ever find anything in a bookstore (which takes so long to find anything good, and you don’t have the benefit of reading reviews or critical looks at them) and if I do, it’s because I’m looking up the titles on Amazon to see what people are saying about them. If Barnes and Noble says “LOOK! THIS BOOK IS GREAT!” but 50 people on Amazon say “… Wow this did not live up to the hype,” then I’m not going to buy it. 

    • Anonymous

      I browse online, too, but the consensus seems to be that a lot of people don’t. Or they only browse on Amazon because of the collaborative filtering. I just heard publishers and agents talk about how they are convinced most people don’t find new authors online. I hope they are wrong.

  • Robert Mitchell

    Speaking of abuses of power, Macmillan, for example has raised prices on ebooks in Australia by 90%.  Companies that do that could use killing as they become useless resource drainers.

  • Inette

    Until you have watched your only bookstore disappear, truly you do not realize the necessity and value of  walking the aisles in search of the unknown, but newly discovered book.
    I returned from book tour (with my own newly published book in hand) home to Kaua’i, Hawai’i  (population 65,000) to find that our only bookstore – Borders – had closed its doors.  I still press my nose against those empty windows.  Our Island home is now without a bookstore.  Amazon does not replace that.
    Inette Miller
    Grandmothers Whisper

    • Lizabakewell

      Gather some friends and community members and start a bookstore. It can be done. I have not done it. We have indie bookstores STILL thank goodness in Maine. But I read about Ann Patchett’s store in Nashville and smile.

  • Andrew

    There’s a point being missed here.  E-readers and cheap electronic editions give value to a book.  As a writer and an avid electronic book reader, I am happy to download in an instant a text for a few dollars.  I see that as good value.  If publishers want to retain their powers they have to re-define their sense of value in the books they publish.  This means giving stuff that the electronic editions are not going to have such as more story.  Let us see more than one text packaged in a single edition. Usually the preserve of cheap editions, let’s see ‘omnibus editions’ up in mainstream quality.  Let us see discounts on subsequent purchases.  Let us see really cool covers or formats that would be a joy to display. Let’s see an end to puffing up the volume of a book so small stories look big. Let’s see decent bindings that enable a paperback to lie flat when opened. Let’s see decent quick and economic delivery of ordered books. What no one mentions is Amazon’s commitment to delivery.  This is a key aspect of the book buying business that publishers simply walk away from.  And above all let us see the purchase of a book being the access to other books and communities. An earlier commentator was right when he said the publishing house have sat on their hands frozen in the headlights.  They do not deserve to win this fight, if this is the best they can do.

  • Rita Mills

    Barnes & Noble turned their backs on the small independent publishers, so when they fold (I give them 18 months at the most) I will be laughing my (&^*&^& off, because they finally got served what they have been dishing out. The same goes for the Big 6. I thought sure they would have all drowned by now because they have their noses so high in the air.

    • Dominique Raccah

      I started Sourcebooks, which is a small independent, 25 years ago with one book (and a bad one at that). Over the years, Barnes and Noble stocked my titles (in very limited quantities to start), gave me feedback, read my books and helped me enter new categories even when I didn’t have any experience or background.

      Today, Sourcebooks publishes 300+ titles a year in almost every major category including childrens books, fiction and calendars. We had 12 New York Times bestsellers last year and have already had one this year. My take on BN (obviously very different from yours) is that they have often been a key ally when smaller publishers grow and succeed. They require that your books sell. That you put in rigorous business processes. And that you be committed to your books; that you work to make them successful. You can see descriptions of Amazon’s treatment of smaller publishers above.

      • http://twitter.com/andreadbc Andrea B

        Hi! I have heard about Sourcebooks…  Could you please tell me why The Water Wars isn’t available as an eBook here in Spain or in Latin America? I know that it probably has to do with the author-publisher contract, but I thought that I should tell you anyway that I would’ve considered buying the eBook, but… I can’t (you won’t sell it to me!)

    • Lizabakewell

      As an author on a book tour last year, Barnes and Noble in DC was really wonderful to work with. It had something to do with the manager of the store, who seemed to have quite a bit of say over what was sold and where it was to be displayed. I was surprised, as my book tour had been exclusively to that moment in indie bookstores, all of whom were vibrant centers for their communities, not “only” sellers of books, but promoters of readers and literacy and public discussions. You cannot download that experience, as the sign reads above the cash register at The Tattered Cover in Denver, where I read my book after having had a delicious dinner in the restaurant connected to the store. On line, B&N, unlike Amazon, never sold my hardcover (or e-version) book for 2.99, within the first four months of its release by W. W. Norton and for a stretch of several months. As a first time author, I did not find initiation into Amazon’s tactics pleasant, as they brow beat me and my work.

  • guest

    and one can also see amazon as a “bad citizen” refusing to collect sales tax as bn.com must, closing warehouses so as not to have a bricks and mortar presence where states attempted to do so, thus not only having a price advantage before discounting over others who must collect tax, but also putting people out of work.  Books was never amazon’s game. They lose money on books.  It has always been about how they get a foothold so they can sell you everything you want—cosmetics and washing machines where they do make money.  This is as much a story about culture and what we value as it is about competition and anti-trust law.

    • guest

      Did you know that Amazon started as a BOOKSELLING company? If anything, the only thing Amazon has done is repeatedly revolutionized the industry. I would say they’ve done fairly well with books.

  • Christian K

    So, Macmillian was able to dictate the price at which Amazon could sale their product therefore Amazon has an illegal monopoly.  Hun?  Oh, because there are only two major Beer Distributors, Amazon (which doesn’t sell beer) is monopoly.  Also somehow chicken is involved..   So…  THAT all makes sense. Really?

    “ It’s new authors who lose out if browsing in bookstores becomes a thing of the past. Advances for unproven and non-bestselling authors have already plummeted, by all accounts.”

    Hasn’t Amazon actually created a more equal playing field, where the new author is right next to the Bestseller, rather than the Publisher paying for placement at a bookstore?

    I also wonder how independent booksellers would feel if Macmillian barged into their stores and tried to dictate how to run THEIR businesses. 

    • Pcady58

      Christian, it is not Amazons product-it is Macmillans’-Amazon just sells it.  And you sound like someone who works for Amazon.

      • Christian K

        You are correct.  Amazon sells it and they should decide for how much.  Macmillan is also completely free to decide how much they should charge Amazon.   That’s the way it works with retail at Safeway, Walmart, Target, your local liquer store or comic book shop.

        I just don’t see how the publishers banding together and forcing Amazon to give up price control makes Amazon a monopoly.  Logically it would be the other way. 

        • http://twitter.com/realjohngreen John Green

          If Amazon intentionally loses money to grab 100% of market share, that’s monopolistic behavior that decimates competition and is therefore bad for consumers. That’s how monopolies have worked for centuries.

          If the Big Six were colluding against Amazon, that would be illegal. No one (to my knowledge, at least) has found any evidence of any such collusion.

          • Rarefiednight

            I am going to totally agree with this, and not only because it was John Green that said it. I in a AP US History class. We are currently in the middle of a unit about the Gilded Age and the Progressive Era.  The Gilded Age was when trusts first started to come about and became prominent.  Much of today’s economy is terrifyingly similar to what went on then.  Today’s anti-trust laws are about as effective against trusts as they were back then – which isn’t very.  We learn about history so we can look at its patterns and learn from the mistakes of the past. Instead, we just go in cycles repeating those same issues.  TR isn’t going to show up and start trust-busting (and he never did as much in that way as it often seems).  Maybe we don’t call these corporations ‘trusts’ anymore – there is no more JP Morgan – but they maintain control and act as monopolies to squish competitions as monopolies have always done.  Amazon is trying to create what is known as a ‘horizontal monopoly’ – that is, having control of the entirety of one part of the industry (on another note, the other sort of monopoly is a ‘vertical monopoly’ in which a company has control of every state that something goes through – in Gilded Age terms, it would be like having control of the coal mines, the refineries, the railroad to transport it, the places it is sold, etc.).  Monopoly is never good for consumers.  Hypothetically, if Macmillan had backed down, if B&N hadn’t gotten into ebooks with the nook, if Apple hadn’t come in – then Amazon would have much more control. When it had stamped out most other options, what would stop Amazon from raising the ebook prices from $9.99 to $10.99? $11.99, $12.99, and on upwards? With no other options, bibliophiles would be forced to pay more as Amazon had cornered the market and no longer had any reason to sell books at a high loss the way it is currently doing.
            I hope that made sense and I am not sounding brainwashed or stupid or anything.Also, if John reads this: ohmigod I think you and Hank are the coolest guys ever and Nerdfighteria changed my life.  Also your books are my favorites in the world, Looking for Alaska probably saved my life, and tFiOS is so completely perfect and amazing. best wishes and DFTBA! ;)

  • Anonymous

    I’ve never seen so many victims of Stockholm Syndrome in one forum before. The big publishers and their agent minions have been exploiting the vast majority of their writers for several generations now, yet when the cage door is opened and Amazon offers authors a 70% royalty with full creative control, accounting transparency, retention of their copyright and prompt payment they curse Bezos.  Amazing.

    • http://twitter.com/EvanJGregory Evan Gregory

      Publishers don’t retain copyright, nor do they wrest creative control from authors.  Publishers add value to books by their editorial expertise in addition.  Which is why they are able to sell a hardcover for more than $20 while your average KDP author has a price point between $1.99 and $5.99.   A published author is  able to maximize sales to all segments of the market in a way that KDP authors as yet, are not.  Economically speaking the per unit royalty of a published author is often higher than KDP author.  You may be getting 70% but you’re getting 70% of a smaller pie, and that pie is available to a fraction (albeit a large one) of the total market.  You’re also giving up 30% to Amazon in exchange for what?  KDP doesn’t provide developmental edits on your book, copyedits, cover-designs, or publicity for your book.  KDP doesn’t care if you sell one, a hundred, a thousand, or ten thousand copies of your book, because your deciding to publish with KDP is the only thing that matters to Amazon.  It’s like a long-tail pyramid scheme.  You publish your unreadable book with KDP, and you sell ten copies to friends and family, Amazon pockets 30% of your profits, and wash-rinse-repeat with hundreds of thousands of other folks with best-seller aspirations.  In addition those ten friends, and you, are on Amazon now and are driven by their recommendations to buy other stuff (DVDs, clothes, electronics).  The Big 6 as evil as they may be, are at least interested primarily in selling books, Amazon is just as evil (if not more so) and   is only interested in your intellectual property as a means to drive sales of microwave ovens.

      • Dominique Raccah

        Evan, I thought your comment really interesting and posted it in our ebooks LinkedIn group. Here’s the link:

        http://linkd.in/w7IYGj

        Thanks for your thoughts.

      • Andrew

        Hi Evan,

        What you say is interesting as far as it goes, but you probably haven’t signed a contract with publisher recently where you find you have signed away quite a lot of your rights without being able to negotiate any of them. Your electronic royalties may be 25% of sale price if you remember to get that clause put in, often they are less, and publishers retain those rights for ever – there’s no out of print reversion to author clause when it comes to these rights or any limit to the amount they can discount their selling price (and thus your returns). All that you say about design and copy editing may be true, though the days when there was genuine editing input from an editor are long gone.  Editors are there to see that your book conforms to the strict market profile in which they are selling it.  And the other side of the coin is limited print runs, after which your book is pulped, royalties calculated on actual sales less returns from outlets rather than on the size of the print run of the old days, which affects the income of the author considerably, paltry lump sums from foreign sales and limited publicity geared to specific markets. Amazon is certainly not a saint, but good old book publishers need to stop demonising it and get their fingers out.  There is clearly room for several levels of book in the modern world.  I would be very happy to buy a digital book cheaply with the option of getting a discounted hard back version of it packaged and sent to someone as a gift say.  There are any number of ways in which real books and digital books can live together in the same space. It’s just that publishers need a revolution in their management. I don’t see that happening any time soon. 

        • http://twitter.com/EvanJGregory Evan Gregory

          I don’t sign contracts, I negotiate them.  I’m an agent.   And I can tell you with absolute authority that rights can be reverted on contracts in which one grants e-book rights to a “traditional” publisher.  Most agreements these days have out-of-print provisions that sit a minimum amount of sales for the book to be considered in “print”.  That threshold can be 100 e-book sales to 300 e-book sales depending on the publisher.  

          25% of net receipts is the generally agreed upon standard royalty for e-books, and receipts have gotten a lot better for authors whose publishers aren’t giving 50%+ discounts to Amazon who is turning around and selling the book at $9.99 or less.   

          No one is demonizing Amazon, they’re a great business, and a vital partner for publishers, agents, and authors.  They do, however, have their own interests that are separate from authors, agents and publishers.  Just as agents, authors, and publishers often also have conflicting interests of their own.  Its important to recognize that pushing back against Amazon is not pushing back against progress, or a matter of e-commerce vs. traditional printing and sales chains, its a matter of protecting the vital business interests of publishers and authors. 

          Authors shouldn’t have to choose either traditional or e-commerce, they should be able to enjoy both robust markets.  Authors should be able to maximize their profits both in brick and mortar bookstores and in several online storefronts (and some do).  Likewise, consumers should be able to choose between buying a hardcover in an actual bookstore and buying a Kindle Book from the comfort of their own living room and not feel like they’re destroying literature as an artform by doing one or the other.

          • http://www.susanzakin.com/blog Susan Zakin

            yes, very good snapshot of where we are now.  i’m about to shop a book I’ve spent a lot of time writing, so it’s good to have the business models laid out so clearly, from a writer/agent perspective.

        • Deborah J Lightfoot

          “The days when there was genuine editing input from an editor are long gone.  Editors are there to see that your book conforms to the strict market profile in which they are selling it. ”

          Thank you, Andrew, for putting it so clearly. That has certainly been my experience. These days, editors seem mostly concerned with imposing conformity. The explosion in indie publishing is at least partly a response to the straitjacketed formulas of corporatized publishing.

          Indie publishing is a lot like democracy. It may be messy, but it’s vigorous. People get to speak their minds, unconstrained by the gatekeepers. I’m watching the trends with great interest.

          • http://twitter.com/iucounu iucounu

            Nonsense. I’m sitting in an office right now full of editors, all of whom are working hard editing books – providing ‘genuine editing input’.

            For some reason people like to keep repeating this lie about editing being a thing of the past. I think it’s so that they can bolster their us-vs-them model of publishing – all ‘gatekeepers’ and ‘conformity’ and ‘straitjackets’. None of my authors share that view.

            I like indie publishing, because it serves certain markets that we trade publishers aren’t really able to access at present. I also like trade publishing, because – unlike many of its detractors – I actually understand the economics of it, and the manner in which it adds value to an author’s creative effort. People who are trying to turn the book trade into a sort of culture war, complete with skewed propaganda, are, in my opinion, unhelpful.

      • Judson Roberts

        ” You’re also giving up 30% to Amazon in exchange for what? ”

        How about for the fact that they are selling your book for you, and are doing so on the single largest sales platform in the world?

        • http://twitter.com/EvanJGregory Evan Gregory

          If you grant rights to a publisher your book goes on Amazon, it also goes on B&N, iTunes, Sony’s e-book store, FictionWise, Overdrive, etc.  and physical copies got to B&N, independent bookstores, specialty retail accounts etc. etc. 

           In addition the publisher prepares your work for entry into that marketplace by providing editorial guidance, art direction, publicity etc.  

          You think books edit themselves?  You think those covers design themselves?  You think that those books copyedit and typeset themselves?  That extra work costs money, but it also adds value to a book.  Authors who self publish often have to do that stuff themselves, and it takes time away from the actual revenue generating enterprise they should primarily be engaged in, namely WRITING.  In addition they’re giving up 30% to an entity for mere access to the marketplace.  It hardly seems fair to me.  Agents only take 15% and we do a lot more than that. 

      • Clarev

        Another example of Stockholm syndrome.

        • http://twitter.com/EvanJGregory Evan Gregory

          I doubt you could find Stockholm on a map, much less describe to me the meaning of Stockholm syndrome. 

          • Anonymous

            And there you have it, folks, the attitude which continues to endear the publishing industry to the public at large.  With jejeune ad-hom to boot.  

            With an attitude like what, why shouldn’t the public just adore you?

      • http://www.susanzakin.com/blog Susan Zakin

        I’ve never quite figured out what the “expertise” is.  Going out to lunch?  

    • Susci2005

       Amazon pays authors 70% when they agree to price their books below $10.  That authors are willing to join Amazon in devaluing their work is staggering.  A culture that wants things cheap or free sacrifices much– never before have I seen creative people willing to lead the charge lowering the value of their own work.

      • Clarev

        70% of $10 is $7.   Do your royalties on print books match that?  It’s not devaluing books to say that ebooks should not be priced the same as print books– they don’t cost as much to produce, ridiculous claims from publishers to the contrary.

        • Anonymous

          Fully agree with Clarev.  Every writer that I know wants a. to make a living writing and b. to reach as many readers as possible with her work.  If she can make more and reach more readers there is nothing devalued but the inflated claims of publishers that would try to convince authors that selling an ebook for $16 is a good deal. Actually it results in fewer readers and less money ie. $16 less 30% (agency Model)= Net $11.20 X 25% royalty=$2.60 less agent’s 15% or $0.40= $2.20.  Amazon and BN both share the same royalty model and together they are allowing more writers than ever to quit their day jobs and write full time – that’s value.

          • http://www.rowenachery.com rowenacherry

            Factor in the fact that at 70% royalty with Amazon, you are agreeing to lending, plus up to 10X account sharing .

          • Anonymous

            The lending and account sharing only kicks in if you opt into the KDP Select program otherwise it is a straight 70%, the same as BN’s Pubit. Authors with several titles who have designated some books as Select have reported good results with all of their titles. I really have no axe to grind,  if for some reason the Big 6 terms sound good to you, go with it. The important thing is to keep writing and know that there are decent alternatives.

          • rowenacherry

            I am sorry to disagree, AvantiSmith, but you are mistaken.

            I did not opt into the KPD Select program, and nor did my publisher.

            But Lending is Enabled. The “lending” terms were hidden in the small print, and my publisher did not notice when opting for the 70% royalty.

          • Anonymous

            I have six titles up without lending enabled, however I put them up some time ago, perhaps before lending was initiated. You can always pull your title from KDP and go with BN, Smashwords,  etc. Good luck.

    • rowenacherry

      Are you sure about the “accounting transparency”? Is it possible to audit Amazon? Or is there only transparency as long as one believes what Amazon tells one?

  • http://www.facebook.com/people/Ed-Renehan/574411226 Ed Renehan

    So far as antitrust is concerned, the real antitrust issue = something the AG loves: monopolistic price-fixing (aka, agency pricing) on the part of the Big 6, this being looked into right now by the U.S. Justice Department and various authorities in the EEC.

  • Libby Kopo

    Let’s not forget the B&N drove many independent booksellers out of business, and bullied publishers in its own way. I’d like to see more independent bookstores. THEY are the booksellers that really help new authors — unlike many (though not all) B&N stores, they’re owned and usually staffed by people who love books! They’ll handsell new books they like.

    To me, anyhow, B&N has a creepy corporate feel –even the music the stores play is dictated by headquarters.

    • http://www.facebook.com/people/Joseph-Steven-Smith/1452690823 Joseph Steven Smith

      Absolutely, Libby.  We need more independent bookstores.  They are much more than purveyors of books and the like.  They are community meeting places that host readings, speakers, and other activities.  Unfortunately, the trend is in the other direction.  The Bay Area here in California has lost a number of long-time bookstores due to the depredations of Amazon and the big-box chains.

      • http://profiles.google.com/rosatcollege Ros Clarke

        If what you want are community meeting places to host readings, speakers and the like, may I suggest you visit your local library?

        • http://twitter.com/moonbridgebooks Linda Austin

          The local libraries in my city can’t sell books. That’s not their business. They have to bring in a local indie bookstore to provide an author-speaker’s books, bought at decent price point through Ingrams, not Amazon. 

        • http://www.facebook.com/people/Joseph-Steven-Smith/1452690823 Joseph Steven Smith

          Well I happen to have worked part-time in a library for the past twelve years, so I know a bit about that.  My library does all those things.  But the fact remains that there is a great need for more independent bookstores, not fewer.  And the fact of the matter is that libraries themselves are in trouble, especially the smaller ones, due to funding cuts and declining patronship.  In addition, as libraries have shifted more to electronic media (computers, DVDs, CDs and the like) the number of actual books in libraries has declined, in some places drastically.  We need both bookstores and libraries.  The key issue here is endangered literacy.  Its effects are everywhere apparent and worsening.

  • Anonymous

    This article makes a lot of good points, but I worry that it strayed into bias and a lack of fact checking because of this sentence:

    “ Amazon wanted to price every Macmillan e-book, and indeed every e-book of every publisher, at $9.99 or less. ”

    As  an early adopter of the Kindle, I know that that statement isn’t true. Amazon wanted “bestsellers” by all publishers to be $9.99 (or less) but there were certainly many books over that price before agency pricing kicked in. What Amazon wanted was to be able to control the price and advertise that bestsellers were never (or almost never) over $9.99 on the Kindle platform.

    I also wonder about the line about “It’s new authors who lose out if browsing in bookstores becomes a thing of the past.” That does not seem to have any stats to back it up.  I would like to see a chart of new-author advances over time before I accept a cause for their decline.

    That said, the antitrust situation does seem to be a real issue and not just for booksellers.

    • http://twitter.com/moonbridgebooks Linda Austin

      You’re right, the browse-factor really isn’t there for small-time authors, and big B&N doesn’t usually carry indie-pubbed books anyway, but the small independents certainly will, especially if the books are distributed by Ingrams. B&N will order via Ingrams, though, if you want to do an author event with them.  These author events are a foot in the marketing door for new authors, esp those independently published.

    • Anonymous

      I don’t have stats, but just went to a writer conference where the refrain from publishers and agents was that they will pick up only books they think will be a best seller and their lists have shrunk. Obviously, who loses out there? New, unproven authors and “literary” authors who might write meaningful, interesting books that don’t sell a lot of copies. I believe it also means that anything not “on trend” won’t be picked up, which to me, is very sad.

  • James Curtis

    What this gets down to is a perceived lack of competition. Amazon is seen as all-powerful, and B&N is somehow the only viable alternative. I like B&N and wish them every success, but if they ceased to exist tomorrow, there’d be a resurgence in independent bookstores. That’s because there’ll always be a demand for opportunities to browse the shelves. The problem in retail today is not understanding or seeing the retail experience as a competitive advantage over net-based entities.

    Amazon is a corporate bully and has not been a good corporate citizen. What it has done is cowed the publishing industry–not known for its forward-thinking ways–into believing that it is all-powerful and holds all the cards. (Pay no attention to tbe man behind the curtain.)  This is only true if the industry and the Guild are willing to buy into this notion. If the industry sees Amazon as the only wayof selling its products, that is what will eventually result. If, however, the industry–and by extension the Guild–goes looking for creative (and aggressive) ways to deliver products to end users without Amazon being part of the model, and uses its inherent muscle in doing so, it can make a real difference. Impossible? No. Difficult? Yes.  

    Amazon is never going to go away, and it is responsible for a great many improvements in the bookselling process. If it is allowed, in effect, to become the entire future of commercial publishing, it will only be because the publishing establishment rolled over and let it happen.         

    • Julie

      “if they ceased to exist tomorrow, there’d be a resurgence in
      independent bookstores. That’s because there’ll always be a demand for
      opportunities to browse the shelves.” 

      I wish this were true, but being a showcase for books that are then purchased at Amazon isn’t a very sustainable business model.

      • Anonymous

        Agreed, “The Little Shop Around the Corner” is as dead as, well… Blockbuster Video.

    • Tizzybean

      Amazon is NOT the problem!! The problem is GREED!! As the major book publishers have been sold away from people who knew the book business to corporations who don’t and so rely on marketing and PR instead publishing has been dying the slow death of a zillion cuts. Experienced formerly sucessful id list authors and illustrators have been driven away by disrespect, poor advances, insistence that all books must meet ridiculous sales quotas in excessively short periods while special deals for big chains make it impossible for independent bookstores to survive. And lets not forget paying illiterate “celebrities” zillions to “write” children’s books, only for the celeb’s name on the cover while ignoring, insulting and otherwise hassling proven people with real ideas out of the field entirely. And then there are the libraries and Librarians, also disrespected and ignored these days. Let’s add this up:
      lost writers and artists, lost bookstores, lost librarians, lost people with backgrounds in publishing real books, too many celebrities eating up too much money. And lets not forget the insistence that EVERY new manuscript must be a guaranteed Harry Potter style blockbuster or we won’t do it mentality.
      Seems Amazon has played a much smaller role here than what it is accused of.
      In my experience, Amazon has picked up some bloodied and battle weary creative types and offered us other opportunities and avenues.
      It happened to the movies, it happened to the music business and now its
      publishings turn and they have no one to blame but themselves.

      • http://www.susanzakin.com/blog Susan Zakin

        yes, yes, yes!

      • guest

        Greed. Absolutely. I’m one of the ones who has been driven away. Been making a nice living writing children’s and YA fiction for 23 years, have won awards, have sold over 1/2 a million books (apparently not enough). I get letters from kids every month saying things like “please don’t ever stop writing great books . . . ” Which makes me feel guilty. But over the past few years I’ve had four new projects rejected (by my two Big 6 publishers) One of my editors was fired in the down sizing. WHen I finally asked my other editor what *would* sell, if these projects I was sending her would not. Her answer: “Vampires. But don’t send me a vampire story because I won’t publish it.” 

        So yes, the industry is eroding not just from bullies, but from  a focus on blockbusters only. And that’s out of a desire for survival. Reminds me of slavery days when a land owner (like Thomas Jefferson) might have thought slavery was a terrible thing, but they kept their slaves because they would end up in economic ruin without them because of the economic realities of the day. And yeah, I guess we’re kind of the slaves. Well, I just ran away :)

        Doesn’t sound like Amazon is a good place to run away to, however. See posting below about what happens if you actually do well selling a book with them.

  • Crypti Mundi

    Looks like needless panic and “Fear/Uncertrainty/Doubt” spread by big
    paper publishers paying a lot of money to skew these news magazines.
    Propaganda works both ways, and I’ll bet these anti-Amazon stories reek
    of Payola.

  • MSueWillis

    Monopolies are generally evil, and I hold no brief for Amazon.com– although why Amazon’s evil makes Barnes & Noble and Big Publishing into good guys is beyond me.  B&N with their end-of-the-aisle bribe stacks and books with a shorter shelf life than yoghurt.  Puh-leeze.

    I personally have published with big publishers, small ones, university presses, and an independent co-operative press.  While I am, at least for the moment, still a member of the Authors Guild, I do not find them representing my interests.  AG works for  Scott Turow and  others who make a lot of money selling books.  I’m glad Mr. Turow and his ilk have a guild to represent them, but don’t let the Authors Guild fool you into thinking it does anything for people who don’t sell a lot of books.

    So we’re living in interesting times.  Lean back and enjoy the ride.

    • http://www.rowenachery.com rowenacherry

      Maybe, in my opinion, because Amazon has the ability and the power to infringe copyright and get away with it.

  • http://www.facebook.com/people/Ed-Renehan/574411226 Ed Renehan

    Suggest you simply change your name from “Authors Guild” to “Authors Opposed to Free Market Competition, Technological Disruption of Old Business Models, and the Inevitable Future.”

    • http://www.facebook.com/people/Joseph-Steven-Smith/1452690823 Joseph Steven Smith

      To paraphrase Goebbels, “When I hear the phrase free-market competition, I reach for my handgun”.  Free-market competition usually means the chicken is in the fox’s mouth but it’s not dead yet.

      • http://www.facebook.com/people/Ed-Renehan/574411226 Ed Renehan

        So you concur with the name change suggestion, I take it.

        • http://www.facebook.com/people/Joseph-Steven-Smith/1452690823 Joseph Steven Smith

          A better name would be “Authors Opposed to What is Risibly Called Free-Market Competition”

    • Donmuller

      “Free Market Competition.”  How quaint!  And the “Inevitable Future.”  Sweet!  I always thought the direction of the future is forward, not backward.  Oh well.  Silly me.  

    • Linda Armstrong

      Obviously, you are not a member.

  • http://www.antellus.com/ TMoore

    This article echoes what I have seen developing over the last four years. It is accurate in the sense that anyone who deals with Amazon either knows what risk there is with doing so or does not, and at the same time is tempted to try and reach Amazon’s vast consumer base without getting good results. However, Amazon cannot dictate to authors with impugnity. One punishment can be to simply publish the next ebook and not post it on Amazon. The other is to continue to sell directly from a private web site, where Amazon cannot excercise full control over your content. A third punishment is dealt by Amazon to itself, in that it has programmed its reading buyers to expect low to loss prices (or free giveaways) instead of paying a better price for the content. That is because technically the price of an ebook posted to Amazon is really a licensing fee to use the content paid for. I think once you realize this you won’t find it so profitable to use Amazon at all. As an independent author I have monitored the number of ebooks which now populate Amazon and it is really impossible to make the same amount of money as one can expect for the hard work and proberty paid to the published content. I use the ebook to tempt readers to buy the paperbacks but right now it is more difficult to sell an ebook on Amazon than ever. And thanks to Amazon’s continued interference with the general book business, I may be one of those authors who will avoid treating Amazon as a useful market for the future, and see it as an active and agressive competitor instead of a partner.

  • Laura Harrington

    I understand the passionate feelings on all sides of this debate.  But I would suggest that we start paying attention to that central, key issue of monopolies.  We need anti trust laws and consumer protections. 

  • David Chacko

    It’s good that the Author’s Guild has finally identified the enemy.  It’s called the Future and no self-respecting writer would have anything to do with it.

    • http://www.facebook.com/people/Joseph-Steven-Smith/1452690823 Joseph Steven Smith

      Of course.  The Future is not 1984.  It’s just a brave (but not terribly literate) new world.

  • C. Heyer

    If you’re surprised by the negative comments on this article, it must be because you haven’t tried to sell a book lately.  Would you think that 40,000 in sales might get you a contract on your next one?  Nope.  Not good enough.  So the writers went elsewhere–to Amazon.  Now Amazon is getting so big, they’re pounding the writer too.  The publishing establishment waited far too long to do anything productive to address the problems in their own business.  The part I like about the eBook business is that you license your book.  You don’t end up liking the deal, you can get out of it.  Some big company hasn’t grabbed all your rights and told you you’re lucky you were one of the chosen and you’re getting a whopping 15%, of which you give 15% to the agent.  This probably isn’t even live online yet, and Amazon is trying to figure out how to take the rights in perpetuity.  Jeff Bezos wants to be “the only one.”  The publishing companies need to start making better deals with the writers.  Make it a real partnership, change the game.  Is there enough imagination within the business to do that?

    • http://www.rowenachery.com rowenacherry

      C. Heyer, you may find that, even if you “license” your book, you cannot get out of every deal. For instance, I saw what I took to be a suggestion on the Goodreads Author Feedback Group that, if you list an e-book for sale on Goodreads, and you sell a book, you can never delete it…. you can only switch between “for sale” or “free”.
      This could be a problem for KOLL authors.
      Also, with Amazon, if you sell an e-book, it can be hidden, but it will always be there for any customer who needs a back up… even if the e-book should not have been sold by Amazon in the first place. My worry is, what about customers of the future who wish to “lend” a hidden book?

  • truman

    This is a classic case of technological disruption. It was only a few years ago when publishers were worried about B&N having too much power over the distribution of their books, and now publishers are counting on B&N to save them from the Amazon beast.  On the retail end it’s natural that consumers will come to expect lower prices; this has happened in every other “software” category, especially music. No one plunks down $18.99 for a CD anymore so why buy a book for $25.99? So the game has changed; get used to it. One thing the author fails to mention is that the publishers themselves went through a stage of mergers that placed most of the power within a few big players. Shareholders from these big corporate powers  demanded never-ending growth and profits and weren’t willing to invest in new talent then.  Funny how it was okay when publishers were exhibiting the same behaviors that Amazon is being accused of now.

    • Guest

      An $18.99 CD was grossly overpriced; even a $12.99 CD will net a tidy profit, and that realization is what killed the big mall music stores.  Even $1 per song is very profitable in the music industry’s eyes, otherwise they wouldn’t keep that pricing.

      What Amazon does, however, is sell items at a loss to gain clout and market share.  When the mall music stores sold CDs at 18.99, there were still small independent stores around willing to sell cheaper and still make a profit.  With Amazon, most of those independent bookstores are all gone.  There is nothing left other than the dubious bedfellow of B&N to protect the consumer from Amazon.  

      Amazon goes one step further, however:  they encourage you to walk into a brick and mortar store, check out an item, and then use their app to buy it from Amazon.  In effect, they are using their competition as their showroom.  What happens when their “showroom” disappears?  Amazon won’t care; they will still sell you the stuff, but you can bet that it won’t be at the same cheap price as before.  They’ll have no competition to keep them honest, and Amazon has no intention of letting any competition get off the ground.

    • Steve

      Barnes and Noble having power?  Hey!  What about Crown Publishers and bookstore?

      You’re all forgetting it’s the author’s grace that these outlets are available.

    • Anonymous

      Yup.  Sooner or later, writing is going the way of music — there are a lot of amazingly good musicians out there.  Only a tiny percentage of them make their living at music — and the only thing “enslaving” an author to any of this business is the presumption that if he’s any good, he has to make his living from writing.  (Which, inevitably, turns into “make his living by constantly marketing his writing… which isn’t the same as writing).

      (and the reverse notion, that self-published authors are all by definition dreck, because of course the Big 6 spot all the good ones and whisk them away to the midlist fairy-fairy-land….)

  • http://www.authorplanet.org/ Jodyrein

    Don’t know why I’m surprised by the negative comments on this marvelous article, but I am.  Terrific analysis. 

  • Darrell Delamaide

    “Established authors, for the most part, do fine selling through online bookstores. It’s new authors who lose out if browsing in bookstores becomes a thing of the past. Advances for unproven and non-bestselling authors have already plummeted, by all accounts. Literary diversity is at risk.” 
    What planet are you living on? What new authors are you talking about — the lucky few that scrape through a series of middlemen to finally get into print? Wake up Authors Guild! If you continue to betray a bias as representatives of established authors who have a vested interest in a flawed and doomed system, you will go down with that system. There is a whole new class of authors — independent authors — who will also need the kind of neutral assistance the Authors Guild can provide. I published three books with mainstream publishers — Doubleday and Dutton. I couldn’t find a publisher for my latest novel so I self-published in POD and ebook. I listed for distribution everywhere and Amazon was the only outlet that sold any ebooks. So it was a no-brainer to sign up for KDP Select when Amazon offered it. Amazon is the future of book publishing, so stop treating it like the enemy. It is the enemy only of legacy publishers and their franchised bestselling authors — who of course dominate the Authors Guild board. Don’t pretend to be representing me when you cling to B&N. Amazon will find competition, but not from an inefficient dinosaur like B&N, which has done more than any institution to narrow the midlist market by centralizing purchasing and often not buying a single copy of newly published books for any one of its 700 stores. I’m astonished at the insouciance and naivete of this posting. The Authors Guild has done a lot of good work for writers, and I’ve been happy to be a member. But I will need to see some evidence that you have a clue about where book publishing is going before I renew my membership the next time my dues are up.

    • http://www.facebook.com/people/Ed-Renehan/574411226 Ed Renehan

      Right on.

  • Nixnames

    “Literary diversity is at risk.”

    Oh, give me a break. It gets more diverse every day because indie authors can now publish and make a reasonable living from their writing. I guess the dinosaurs are finally starting to realize they’ve been hit by a meteor. It’s a brand new world. Bring it. 

    • MuseofHell

      You say that as if the indie author or small publisher can put out a quality product through POD and ebook and expect the buying public to a) know who they are, b) know the name of their book and c) where to go to purchase it.  You can put your ebook/print book on Amazon every day, you can blog and twitter continuously, go through alternate distribution channels with your POD printer and, unless you have a rather substantial advertising budget, it is virtually impossible to make a “living” doing so. Or, you can give Amazon an exclusive to market your product for “expanded” promotional assistance, and hope they get around to your book sometime in the next century for that big “promotion.”  The amount of dreck available on Amazon for 99 cents or free is astounding.  Any fan-fic writer who thinks they are good enough to write and publish a book can put up a work on Amazon, Nook, iPad and several outlets (and hundreds of them do so every week) for the cost of their time only, which just means there is much more content for the reader to wade through in order to find a book/author worth trying.  If you know something the rest of us do not regarding marketing a book published through a small press or self-published, please, feel free to share.  Even “name” authors who do not want to go back to the Big 6 have trouble rising above the mediocrity flooding the ebook markets because of marketing and advertising costs.  And let’s not forget the pricing system used by Amazon:  if you will price your ebook between 2.99 and 9.99, they will give you a 70% royalty; however, if you want to price above or below that range, they will give you a 35% royalty.  So who are the only authors pricing their ebooks between 12.95 and 17.95?  The authors who have a large enough following they can expect their fans to shell out twice the amount of the majority of ebooks, just because the fans like that author.  Even if some readers cannot afford or will not pay, say, $14.95 for an ebook, the author with a fan base can count on a certain amount of sales which, even at 35%, will result in a substantial income.

      Yes, the publishing industry is changing, but it is not just a matter of the Big Six going belly up and all authors either going to small publishers or self-publishing.  There is still a very large gap between authors who make enough money to advertise in national magazines and on television – those with name recognition who will be interviewed on programs that people actually watch as opposed to an indie podcast – and independent authors and small publishers trying to attract readers through marketing they can afford.

      Do I think the Big Six brought this on themselves? Absolutely.  Do I think it creates a level or fair market in which everyone now has an equal chance of success?  No.

      • http://www.rowenachery.com rowenacherry

         That 70% isn’t as simple as that. For the 70% royalty, the e-book has to be “lending enabled”.  Moreover, up to 10 (I think/I’ve heard) people in a book club could share an Amazon account and dedicated credit card, and all 10 could read the one purchased book simultaneously.

        So, you get 70% (but you could be selling eleven-for-the-price-of-one.

  • http://claudenougat.blogspot.com Claude Nougat

    Thank you for an interesting article – really the best recap of the on-going situation in the publishing industry that I’ve read in a long time!

    The industry is certainly on fire, and who’ll pull out in the end is not quite clear yet. Amazon will win for sure. Barnes & Noble? It will survive if it starts paying less attention to the technical nuts and bolts of ereaders (it’s done enough in this area and is comfortably ahead). It should pay more attention to how its selling platform is organized and copy some of the better features of Amazon (particularly those that link with readers and make life easier for buyers to shop and compare).

    The broader issue – will ebooks dominate the market and printed books disappear in a niche of antique, pretty objects to decorate people’s homes – is really not yet solved. 

    Ebooks could hit a glass ceiling. 

    As one of my fellow authors once remarked, ebooks are services, printed books are goods. A major difference that hasn’t been yet understood or sorted out. It would be imperative for traditional publishers to focus on this and work out an analysis (and a strategy) for their own survival. To consider bookstores as their “only natural market” – and not readers – is reductive. They need to establish direct contact with readers just as Amazon does. 

    Think of it, that direct contact is to a large exent the secret of Amazon’s success…even in the face of  predatory practices with publishers and small presses and book sellers, not to mention their labor practices in their warehouses – which in the end are not likely to explain much of Amazon’s continuing climb and eventual  control of the industry.

    Whoever reaches out directly to readers will control the industry. That’s the trick!

    • http://www.liliandarcy.com/ Lilian Darcy

      Thanks for these insights, Claude, really interesting.

  • Andrea Siegel

    It never occurred to me that Amazon’s bullying was systemic. I thought just a few of the little people would be bullied. When Amazon sold over $6,000 worth of my small press book, Open and Clothed, in one week, a vice-president called me to ask me what I was doing to sell the book.  I cheerfully informed him.  Then Amazon cracked down, said I had no choice but to take a revised draconian contract (they would pay just about what it cost me to print it), or they would cut me off.  OUCH.  I’ve been told by folks who try to buy a copy from the publisher at Amazon that Amazon says it’s “out of print.”  The book is in print.  Amazon lists it for sale “new,” but doesn’t include my small press as one of the sellers.  As book seller, I found Amazon initially supportive, then destructive.  I worry that my writing this will cause them to blacklist me and my books.  I hope that doesn’t happen.  On the other side, as a book buyer, I find Amazon indispensable.  Life is interesting. Thank you for the research.

    • http://www.facebook.com/people/Terry-Kepner/100002192680415 Terry Kepner

      Andrea: There are many, many individuals and companies that have experienced what you did with Amazon. The other problem, for authors who go the POD route, is that Amazon pays “based on the average monthly sales,” so you don’t see that “pop” at Xmas as sales spike way up. Instead Amazon keeps your money and doles it out over the rest of the year. Do you get paid for the interest that money earns Amazon? Nope. Do you get the opportunity to verify their sales figures? Nope. If you complain, do the reasonably respond and explain why payments are slower than they said, or why a check didn’t arrive on time? Nope, you’re told: “Hey, if you don’t like the way we do things, sell your books somewhere else.”

      • http://www.facebook.com/people/Joseph-Steven-Smith/1452690823 Joseph Steven Smith

        It’s a free-market monopoly!  Yea!

  • http://www.nashvilletechfeed.com/ David Beronja

    I agree one company having to much power is bad for the market could you ask the same thing about the large publishers doing the same to small book stores? 

    What about the cost between print and ebooks? I’m seeing ebooks at $1 or so different from the print versions..and not necessarily lower. I may not know the intricacies of whole process but it doesn’t take much to figure out that printing, warehousing & transportation costs do not equal 98% of the physical book cost from start to finish. Where is the digital discount? I believe if the publishers could charge the same amount for ebooks they would and the difference would go right into their pockets.

  • Deborah J Lightfoot

    $9.99
    — “which publishers consider ruinously low” — is the “natural” price
    for an ebook? Not in my world. I’m finding that readers now believe 99
    cents is the “natural” price for an ebook. http://djlightfoot.blogspot.com/2012/01/cheap-reads.html

    Others have commented on the blogification of books. Small publishers and independent authors who sell their works for 99 cents are setting up the book business  for even greater troubles ahead. Print is rapidly going the way of the dinosaur. Soon, I believe, most new books will exist only as ebooks. How, then, will writers make a living? By selling a million copies for a buck apiece? Amanda Hocking has done it, but I’m not sure that will prove to be a sustainable model for e-publishing’s future.

    • http://www.facebook.com/people/Pam-Uphoff/1533576376 Pam Uphoff

      Too many people focus on the spectacular breakout best sellers. How about writers who put up their back list of ten books and add two a year? It is becoming possible for a writer to earn a living as a full time writer. A few will get rich, but a whole lot more will simply get on very nicely, thank you.

      • Tbud1199

        Two a year. Hack.

        • Leo Champion

          Yeah, hacks make money. Wasn’t money the subject of this conversation?

          Since when has taking six whole months (100K words, 180 days – that’s barely 500 words a day) to write a book made you a hack in the first place?

      • Deborah J Lightfoot

        The point I meant to make is that 99 cents is an absurdly low price — an unsustainably cheap price — for a book. You can’t buy a cup of coffee for 99 cents. I’m appalled that many readers now expect to buy a 400-page novel for the price of two postage stamps. I’m a slow, meticulous writer. It takes me two years to produce a 400-page novel. I’m not inclined to sell it cheap. A floor is needed for ebook prices. I suggest $2.99 as the absolute rock bottom for a well-crafted, professionally edited ebook.

        • Linda Armstrong

          Deborah, as you know, many 99 cent e-books are not worth your valuable time to read for free. As time goes on, readers will discover this. There will be the writers, whose work will be issued through traditional channels (virtual and/or physical) and purchased for higher prices, and there will be the long-familiar, though expanded, vanity press offerings. Some of the latter, especially motivational/charismatic, local history, hobby, and special interest, will sell steadily. Of course, there will be occasional breakout books. Breakouts have always been exceptions. Have you seen a remainder table lately (or 20 years ago)? By the way, who created the mid-list “death spiral’? Uh, think that kinda predated Amazon, no? Guess what I’m saying is that what a company does will, eventually, be done to it, and the way things are speeding up, eventually comes sooner than later. Who knows what we will see next year.

  • Mindy A.

    Amazon provides ease and efficiency for book orders. However, this report, and the many concerning the terrible conditions for the workers at Amazon warehouses, are so troubling that one questions whether the company has any integrity at all. The various electronic reading machines–which are, in fact, unaffordable to vast sections of the population–have also proven to be a sort of Trojan Horse. As for Barnes and Noble, which put so many small bookstores out of business, to now be endorsed as the champion of brick-and-mortar establishments just leads to a rueful laugh. Meanwhile, the public education system, which is supposed to teach the next generation how to read, is under fire from all corners. Macmillan seems to have won an important battle, but the war for decency in the marketplace is much, much larger, and it may not be winnable by the side favoring publishers and authors.

  • Dynneson

    This is similar to the situation between land owners and oil companies. Texas law allows the oil company to come on to the land and drill for oil and the oil companies are so powerful that the land owner get pushed around and his property rights ignored. Government is the problem and has become the arbiter of winners and losers.

  • Jean Henry Mead

    Thank you for this valuable report. I’ve printed it to digest thoroughly.

  • http://twitter.com/Dirk57 Dirk57

    “That display space they have in the store is really one of the most valuable places that exists in this country for communicating to the consumer that a book is a big deal…”

    So it certainly doesn’t help the bookstore cause when that oh-so-valuable display space is filled with utter crap most of the time.

    • Linda Armstrong

      We all know that the corner and end real estate is for sale. It is communication in the same sense as a Super Bowl advertisement or a billboard. Does it mean the book is better? Well, any of us who has purchased such a book without reading reviews can answer that with an unequivocal no. How many of us have dumped books after reading the first five pages? However you feel about it, you might take a look at what has happened to photography. When digital cameras first appeared, most people said they would never replace film…