Amazon vs. Hachette: Where’s the Beef?

The Battle.

To hear the pundits tell it, a battle between good and evil is raging across cyberspace as Hachette faces off against Amazon in a crusade to protect all things literary from the evils of market-driven pricing. Since I’m not an industry insider, I initially found it difficult to comprehend how something as pedestrian as a pricing structure could evoke such passion. As I understand it, Hachette wants Amazon to agree to an agency pricing scheme. Under this scheme, Hachette would set the prices the consumer pays Amazon for Hachette books sold through the Amazon site.  Amazon, by contrast, would prefer to buy those books wholesale and set the retail prices themselves. Big yawn, right? So why do they really care? In general, when it looks like a corporation is motivated to take a controversial stand out of altruism for anyone other than its shareholders, two things are probably true. First, the propaganda is working, and, second, if you want the truth, you’ll need to dig deeper.

Where’s the Beef?

Amazon supporters argue that if Amazon loses, Hachette would keep ebook prices abnormally high.  But that contravenes common sense, right?  Ebooks are cheaper to produce than paperbacks, and therefore bring higher profit per unit. If Hachette makes more profit on ebooks, why make them sell less well?

Long-Term Repercussions of an Amazon Win.

Looking deeper, if Amazon wins, like any retailer, they’ll want to optimize their profits by taking costs and sales volume into account.  For example, if Amazon buys a paperback book wholesale from Hachette for $3.00 and it costs a $1.00 for Amazon to ship it, Amazon may decide to sell it for $5.00. That leaves them $1.00 profit.  What about an ebook? If Hachette wholesales the ebook to Amazon for the same price ($3.00), Hachette gets a windfall compared to the print book, since it was cheaper to produce and required no warehousing. From Amazon’s perspective, they can make the exact same profit as the print book ($1.00) by selling that ebook for $4.00 instead of $5.00. They can do even better by selling the ebook for $4.25. The ebook costs them less to deliver so they can afford to pass at least a fraction of that savings along to the consumer, thereby driving increased sales volume and thereby earning potentially greater profits.

The net effect: Under the Amazon model, ebook editions are likely to sell for substantially less than the paperback version, though they may also earn greater net profits from increased volume.  Why would Hachette oppose that?

The Current Hachette System: Lower Production Costs, Higher Prices—Huh?

And yet, oppose it they do! For example, check out this Hachette listing from Amazon (on which Douglas Preston is an author).

http://www.amazon.com/Two-Graves-Pendergast-Douglas-Preston/dp/0446555002

At the time of this writing, the Kindle edition is actually selling for $8.99 while the paperback goes for $8.50. That doesn’t seem to make sense under either model—until one considers what else happens to consumer behavior if the Amazon model prevails. Judging by my own buying habits, if I get free shipping (e.g. Amazon Prime) and if the ebook costs the same or nearly the same as the paperback, I’ll opt to buy the paperback almost every time. For the same price, it feels like a better deal to get paper over pixels.  If, on the other hand, the ebook is always substantially cheaper, even if I tend to prefer paperbacks, eventually I’d probably give in and get a Kindle to start taking advantage of all those savings.  And that, I suspect, is the disaster Hachette is scrambling to avoid.

Trickledown Distribution?

Traditional publishers have been able to negotiate such favorable terms from authors for one simple reason—they have a stranglehold on brick-and-mortar print distribution. Even Amazon can’t compete with them there. However, as sales of Hachette’s print books dwindle in favor of cheaper ebooks, so does their leverage over authors.  Once ebook sales substantially exceed print sales, what author wouldn’t wonder whether the value Hachette was providing was truly worth 85 percent of the take? So when Hachette supporters say they are defending literature, what I think they really mean is they are protecting what’s left of the big five’s print distribution monopoly power, and by extension, their leverage over authors.

Incentive Management

Assuming this is the real reason for promoting the Agency model, it suddenly makes sense that publishers don’t share the production and distribution savings from ebooks with their authors. First, legacy authors are now expected to do quite a bit of their own marketing. If you’re Hachette, and monopoly protection is your real goal, you’ll be very careful to eliminate any incentives for authors to favor selling ebooks over print. Also, because Hachette’s authors aren’t currently making more from ebooks, they’re unlikely to expect much difference in the bottom line regardless of who wins this fight. Think of it this way—if higher-volume ebook sales meant more money for authors than higher-volume print sales, Hachette authors probably wouldn’t be lining up to express their preference for an Agency model that artificially suppresses ebook sales.

Higher ebook Wholesale Prices?

But wait, couldn’t Hachette fix the whole problem simply by adopting Amazon’s model and charging considerably more for the ebook?  Maybe, but most consumers are aware ebooks are cheaper to produce than paperbacks, and they expect cheaper prices as a result. Keeping them the same price is already deeply unpopular with many readers. Authors might take issue with that as well. Assigning a substantially higher wholesale price would likely be a public relations nightmare.

The Color of Amazon’s Hat…

Before deciding whether Amazon is hero, villain, or merely a corporation seeking to maximize value to shareholders, consider this: with respect to market share, Hachette’s loss is likely Amazon’s gain. One need invoke neither a burning desire protect hapless consumers from overinflated prices nor a crusade to defend literature from the perils of unmitigated slush to explain why these corporations can’t come to terms. Just follow the money.

The End of Flinch

Yep, that’s right.  I reached the end of DoHD at 6:05 tonight at 91,000 words, ending at book 4, chapter 7.  Very satisfied with how it turned out. All those pesky loose ends are now tucked securely in place.

That means now the editing begins.  Woohoo!

A reminder, the story portion on the website will be coming down soon.

Flinch grows up.

Where does the time go?  A little over a year ago, I began writing a little serial piece called The Demon of Histlewick Downs as a way to keep myself writing while I worked on getting Practical Phrendonics publication-ready. Almost 6 months ago, I decided on an editor, but there was a catch–she was booked 6 months in advance. In the meantime, I continued typing merrily away on DoHD. Then September came along, and we attended the Southern California Writers’ Conference. There, we got to meet in-person the editor I’d chosen, who reviewed the first few pages of DoHD as part a workshop she was hosting. Based on her recommendation at the workshop, I’ve decided to have DoHD edited for publication, even before PP (in part because it’s a stand-alone effort, while PP is a series). That gives me about three weeks to finish and polish Flinch’s story before the editor gets a stab at him.

Since some agents are leery of representing pre-published works, I’ve decided to stop posting the final installments of DoHD online. Not to worry though–if you’ve been a loyal reader, leave me a message here by mid November and an email address and I’ll see to it that you get copies of the final installments.  I don’t think agents object to beta-readers!

Oh, and that means that over the next few weeks, the rest of the Flinch story will be coming down off the site as he gets ready to transition to this new phase in the process.

Proceed to Chapter 12

Time’s up!

Cover Stories: the Design Observer’s 2012 top 50 picks for Cover Design

The Design Observer has announced the 2012 winners for Cover Design:

design observerAs someone who’s considering self-publishing a paranormal-fantasy series, I’d be interested in seeing the rubric the judges used to decide how to separate the wheat from the chaff. In the past I’ve been given all sorts of advice (solicited and unsolicited) about what makes a good cover, but if the results of this contest are any indication, the judges weren’t privy to any of it.

Apparently, simple monochromatic font covers are in vogue (How Music Works, Shoplifting From American Apparel, The Sniper’s Log, the David Foster Wallace book, Paris I Love You but You’re Bringing Me Down, etc.)  as are covers that contain some sort of note (Girlchild, At Last, What to Look for in Winter, Oblivion, The Flame Alphabet, etc.). The judges also seem inordinately fond of non-head items forming heads (The Investigation, The Bug, Cascade). In most cases, the genre or subject matter of the book are not discernible from either the cover or from the title. In many instances, obscured text or tiny fonts require the reader to use a magnifying glass to deduce the title or author (Cascade, Oblivion, The Flame Alphabet, The Vanishers, Stripped, Girlchild). Courier as a font makes a surprise resurgence as a cover-design element, clearly though, like nudity, only when it’s integral to the plot (Girlchild, Butterfly in the Typewriter).

My favorite?  Far and away, its the attractive cover for The Teleportation Accident. To me, the title and the cover conspire to give an intriguing suggestion about what the book might be about that makes me want to investigate further.

The takeaway message for the self-published author is that award-winning covers can be produced using simple graphic elements and a good aesthetic sense.  Many of these winners used little or no artwork. Of course, the elements that win a design contest may not translate well to selling books. It will be interesting to see whether any also become best-sellers.

Before and After: The San Diego Writers’ Conference

This was my second Writers’ conference.

As we were packing up the car to make the trek to San Diego, I must confess I was wondering whether the trip was going to be worth the cost. After all, I’d just attended a conference in September, and probably not much had changed in the publishing world since then. Not only that, but by an odd twist of fate, almost all the agents there already had a copy of my manuscript, which meant I’d be going without any opportunity for a meaningful advance submission critique.

I’m probably not telling you anything you didn’t already know, but I’m going to say it anyway–I needn’t have worried.

At the last conference, I’d taken the approach that as a beginner, I should lurk to see what the conference was all about. Even when I had the opportunity to read, I passed. Such conventions develop a certain culture, and I wanted to see how things worked before I jumped in.

Not so, this time. If I wasn’t going to get an advance submission, at very least I was going to get feedback. You see, a couple weeks ago I’d gotten some valuable beta-comments that the manuscript could really benefit from an introductory chapter that put the early action into a broader context. I now had that chapter in hand, and I was proud of it. But that didn’t mean it couldn’t benefit from the attention of talented experts, and there would be talented experts aplenty in San Diego.

This time I did not lurk, I dove in. I presented my new chapter in four different workshops where it was dissected and analyzed by a host of writers and editors. As proud as I was of my chapter, I soon learned several key ways to improve it. My biggest epiphany was that I had been lazy about character introduction, leaning heavily instead on my love of snappy dialogue. The problem is, of course, that even the snappiest dialogue rings hollow without a solid mental image of the characters engaging in it. Sure, I had a clear image of those characters, but that’s no substitute for making sure the reader has the tools to ride along with me.

So, if you are wondering what the San Diego Writers’ Conference can do for you, allow me present a concrete example:  I offer the first page or so of my introductory chapter (accessible by clicking the links below) as it existed before the conference, followed by the same segment of text after applying all that conference expertise:

Before

After

I see an enormous difference, and I think you will too!

I’d like to give a special shout-out to the moderators of the various workshops, whose expertise and enthusiasm I found so inspiring:

In alphabetical order:

Marla Miller

Matt Pallamary

Laura Taylor

Bob Yehling

You’re all rock stars!

 

 

In defense of Hilary

Tonight I came across this item on Huffington Post-books:

http://www.huffingtonpost.com/2013/02/19/kate-middleton-attacked-hilary-mantel-plastic_n_2716137.html?utm_hp_ref=books

I confess to having been taken aback by the headline, which suggested that two-time Booker Prize winner Hilary Mantel had been less than gracious in references to Kate Middleton. The first few paragraphs of the article seemed to confirm: seemingly odious quotes and negative reactions by a number of famous persons.  Only at the very end of the article did Huff Po suggest that the initial interpretations may have been taken out of context.  To their credit, however, Huff Po included a link to the full text of Hilary’s speech. Given my current interest in authors and publishing, I was curious as to why such a respected author would go out on a limb like that, and I did what no doubt many would not have bothered to do: I clicked the link.

What I found there shocked me, even though by now, I should know better than to be taken aback by such things. Turns out that in context, Hilary’s comments do nothing of the sort. Sadly, someone who only reads the headline will undoubtedly come away with a negative opinion of the author. That unfavorable opinion will only be bolstered by scanning the first few paragraphs.  Many readers won’t get any farther than that. Even reading the entire article, although it might cast some doubt on the initial impression Huff Po worked so hard to produce in those opening lines, it won’t dispel it entirely. However, reading the entire transcript produces a vastly different impression, and instead of being offended, it made me wish I’d been in the audience!

Treat yourself: click the link.

http://www.lrb.co.uk/v35/n04/hilary-mantel/royal-bodies

As a regular Huff Po reader, I’m left to question whether all their other articles are similarly reflective of the actual truth.

Is such character assassination by subtext truly worth the paltry clicks this salacious headline will generate?  How many books will Hilary fail to sell as a result of readers’ reactions to this article? Even if this misleading negative publicity generates more sales than it loses, as consumers of media, do we really prefer to be titillated rather than informed? Really, Huff Po, is this all the better you can do?

Update: Huff Po now has this subtitle linking from their books page to the article:

Booker Prize-Winner’s Speech Over-Simplified By Media.. Prime Minister Weighs In, Looks Stupid

However, the title of the article once you get there is still:

Kate Middleton Attacked? Author Hilary Mantel Calls Princess ‘Plastic,’ ‘Designed To Breed’

Hmm. One wonders where the Prime Minister might have gotten an impression so erroneous that his comments make him look stupid…

Still, nice to see the media are at least making making some progress.