Amazon Offers Authors 100% Of Ebook Sales To Get Them To Recognize Its Fight With Hachette Isn't About Screwing Authors
from the wake-up-authors dept
To show how bogus that claim is, Amazon today went directly to Hachette authors with a proposal Amazon claims Hachette rejected: offering to give authors 100% of the proceeds on ebook sales.
The letter extends and develops a proposal Amazon made earlier in the dispute, which was dismissed by Hachette. It now offers Hachette authors “100 percent of the sales price of every Hachette e-book we sell.” Amazon also offered to suspend all its shipping delays and price adjustments, which it put in place in an effort to bend Hachette to its will.Of course, defenders of the publishers insist that this is all a ploy for Amazon in its never-ending mission to take over the world:
Roxana Robinson, president of the Authors Guild, dismissed the proposal.Once again, it's confusing to figure out which side the Authors Guild is really on here. Since we started covering that organization, it appears that it sides 100% with the publishers and rarely sides with what matters for the vast majority of authors.
“If Amazon wants to have a constructive conversation about this, we’re ready to have one at any time,” she said in an email. “But this seems like a short-term solution that encourages authors to take sides against their publishers. It doesn’t get authors out of the middle of this – we’re still in the middle. Our books are at the center of this struggle.”
The whole situation is quite bizarre when you think about it. At the same time you have Hachette and the Authors Guild insisting that they're trying to "protect the book" by keeping book prices artificially high, they're loudly complaining that Amazon won't discount their books. Notice some hypocrisy here? If you want to understand why this is happening, the best explanation I've seen so far comes from Hugh Howey, one of the super successful self-published authors who is firmly in Amazon's camp on this fight. Writing in the Guardian, he notes the perverse incentives of the traditional publishing world on Amazon:
Under the previous wholesale model, publishers might price an ebook at $14.99, and with the 50% discount, an online retailer like Amazon was able to discount to a more reasonable $9.99 to serve customers. Customers who expect digital books to cost less than the paperbacks with which they were familiar. With the new discount rate, Amazon stood to lose money by offering that same price. Publishers, meanwhile, were less than enthusiastic about lowering the offered wholesale discount.In other words, everyone really knows that ebooks should be priced lower, but the old publishing world wants to be able to set much higher prices, forcing Amazon to basically make no money at all on pricing the books lower. Given this scenario, it actually makes sense for Amazon to then make this offer to authors directly: it will hand over 100% of ebook revenue, because under Hachette's proposal, Amazon would make no money at all (or even lose money) on ebook sales anyway.
Publishers like Hachette now found themselves in enviable territory. They could price ebooks high – protecting their relationship with high-street booksellers – and rely on Amazon to cut their own margin to the bone in order to move quantities of ebooks. This new situation created the bizarre scenario where authors who once complained about Amazon's discounting are now complaining that they aren't discounting enough. And during these negotiations, parties from Hachette's side are accusing Amazon of raising prices by offering something close to what the publisher itself is setting.
In a presentation to investors, Hachette has stated as a primary goal the control of ebook pricing. Breaking their habitual silence just last week, a representative from Amazon confirmed that the sticking point in these negotiations is indeed price. So both sides have confirmed what's at stake. History would indicate that Amazon thinks ebooks should cost no more than $9.99. Their agreement with self-published authors supports this, as the royalty rate paid halves if the price exceeds this amount. Hachette, meanwhile, would very much prefer to offer ebooks at $14.99 or more and leave any discounting up to Amazon (or any pain up to their customers).