Tag Archives: publishing

Amazon vs. Hachette: The competition starts taking advantage

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For all the articles I’ve read about Amazon’s hardball tactics in their battle with Hachette, I have seen little discussion of the risk it’s taking.  They are obviously leaving an opening for the competition.  The Times finally ran an article about what’s happening on that front.  An independent Seattle bookstore hand delivered copies of J. K. Rowling’s new book along with a “Hachette swag bag.”  And the big vendors were also taking advantage:

On Walmart.com on Thursday, “The Silkworm” was one of three books featured on the books’ home page at 40 percent off, or $16.80. Walmart has also promoted the book with ads on Facebook and through mass emails to its customers promoting Hachette books. On Barnes & Noble’s site, “The Silkworm” was one of four of “the week’s biggest books.” A digital edition for the Nook was $11.99. It was Barnes & Noble’s No. 2 best-seller on Thursday. On Bookish, the website that the major publishers started last year to combat Amazon, it was the first “new and notable” release featured, and was selling for $19.60.

This doesn’t mean Amazon will back down, or that it won’t win.  But it surely is taking a risk.

“Who’s going to blink first?” mused Mr. Sindelar, the independent bookseller. “That’s what everyone wants to know. I have no idea. But a lot of our customers told us they were buying from us explicitly as a protest against Amazon. We live in Seattle, where people go to farmers’ markets. They don’t want to limit the diversity of where they shop. I think this has helped people realize that if Amazon is the only option, that’s putting way too much power in one company.”

Another author complains about the new digital world order

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This one is Tony Horwitz, who wrote the wonderful Confederates in the Attic. He recounts his tale of woe in a New York Times op-ed.  He got an offer from a new digital media outfit to write an e-book about the Keystone pipeline.  They in turn contracted with an ebook publisher to produce and market the book.  But the digital media outfit collapsed before he got his advanced, and the ebook publisher collapsed after the book was published.  He now has little prospect of getting sufficient revenue from the ebook to make the months of research and writing worth while (although the publicity of a Times op-ed is going to help).

But now that I’ve escorted two e-partners to the edge of the grave, I’m wary of this brave new world of digital publishers and readers. As recently as the 1980s and ’90s, writers like me could reasonably aspire to a career and a living wage. I was dispatched to costly and difficult places like Iraq, to work for months on a single story. Later, as a full-time book author, I received advances large enough to fund years of research.

How many young writers can realistically dream of that now? Online journalism pays little or nothing and demands round-the-clock feeds. Very few writers or outlets can chase long investigative stories. I also question whether there’s an audience large enough to sustain long-form digital nonfiction, in a world where we’re drowning in bite-size content that’s mostly free and easy to consume. One reason “Boom” sank, I suspect, is that there aren’t many people willing to pay even $2.99 to read at length about a trek through the oil patch, no matter how much I sexed it up with cowboys and strippers.

It’s a sad story, but Horwitz’s main problems seem to have been shaky publishers and the lack of demand for long-form journalism, not the ebook model itself (which let him publish his story within days of its completion, while it was still in the news).

And you don’t have to deal with shaky publishers to have a tale of woe.  I sold my novel Senator to an enthusiastic editor at William Morrow, a well-established publisher.  But my editor subsequently left the company amid rumors that Morrow was going to be acquired.  The book was therefore an orphan, assigned to a foster-editor who had no stake in its success. Without any publicity or editorial push, it sank without a trace — until I resurrected it as an ebook.  These things happen.

Parents, don’t let your children become authors.  Teach them Java and C++, and let them write code, not books.

Anyone here subscribe to BookBub?

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We’re going to run a promo for Dover Beach on BookBub June 28th.  BookBub appears to be the 800-pound gorilla of online ebook advertising.  And it has raised a bunch of venture capital to get even bigger.

The startup is nearing 3 million members, drives more than 1 million e-book sales every month and generates revenue in the “seven figures” from commissions on sales and fees paid by publishers and authors to be included in the newsletter. What makes all that even more impressive is BookBub has been bootstrapped — until now.

BookBub announced Thursday that it has raised a $3.8 million Series A round of funding from NextView Ventures, Founder Collective and others. Much of the funding is intended to help the startup ramp up its staff of 20, build out the web experience and develop for mobile and eventually expand internationally. But part of the funding is also intended to help BookBub expand from ebook deals to ebook discovery.

The economics of this for an author or publisher are pretty interesting, and a bit scary.  Bookbub charges based on genre and sale price.  Dover Beach will be priced at $0.99 and slotted as science fiction.  The cost for the placement is $240, which is about an order of magnitude more than other ebook discovery sites such as eReader News Today (where will also be running a Dover Beach promotion at about the same time).  The 35% ebook royalty on $0.99 books means that we’ll have to sell around a thousand copies to break even. (Of course, the calculations are a bit different for a series book like Dover Beach, since the hope is that some percentage of Dover Beach readers will go on to read its very fine sequel, The Distance Beacons.)

BookBub claims their SF mailing list contains 400,000 names, so if just half a percent of those folks buy the book, I’ll be doing fine.  My publisher says some promos they’ve done with BookBub haven paid off, although my friends Jeff Carver and Craig Shaw Gardner did really well with their BookBub promotions.  So we’ll see.

My publisher is actually a bit worried that BookBub will become so successful that they’ll crowd out the competition a la Amazon.  What’s so special about it?  I’m not entirely sure.  It has a very clean interface compared to eReader News Today — no ads for JetBlue or Audible Com.  That counts for something.  They seem to have a smattering of mainstream books (today they’re offering Katherine Hepburn’s autobiography), but mainly they offer high-end indie books of the sort you see at other ebook sites, and the deals are pretty much the same.  So I’m a bit baffled.

I let you know how we do.

Slate weighs in on Amazon vs. Hachette

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This article makes a couple of interesting points.

First, mainstream publishers are screwing authors on e-book royalties:

“Look at Harper’s own numbers,” DeFiore wrote. “$27.99 hardcover generates $5.67 profit to publisher and $4.20 royalty to author. $14.99 agency priced e-book generates $7.87 profit to publisher and $2.62 royalty to author.”

Looks fishy, doesn’t it? And the same basic math holds throughout the industry, including at Hachette.

The 15% royalty on hardcovers has always been justified by the costs of manufacturing, storing, and shipping the physical object.  Those costs disappear with an e-book.  But apparently the publishers are not passing much of that savings to the author.  And Amazon knows this.

By leaving royalty rates where they are, publishers have left their nice digital margins hanging out there for everyone to see. And when Amazon sees someone else’s healthy profits, it’s like a dog smelling a steak. As Jeff Bezos has said, “Your margin is my opportunity.”

The other point the author makes is that reduced profits for publishers means a brain drain as fewer people decide to write books:

If publishers make less money on every book, they are going to pay people less to write and edit them, and talented people will decide to do something else with their time. Consider that it takes at least five years, and usually more, to write a definitive presidential biography. If an advance of $100,000 exceeds the budget that an Amazon-dominated world will allow, then the only author who can write such a biography must be either independently wealthy or subsidized by a full-time job, probably teaching at a university.

Do you buy this argument?  I suppose it could be true for mainstream non-fiction.  It certainly seems untrue for fiction — or, at least, it would be balanced off by an influx of talented writers who are simply bypassing the barriers put up by mainstream publishers. If I earned more from my writing I could quit my day job and write more, but that’s fundamentally a function of success in the marketplace, not advances from a publisher.

Publishers as gatekeepers

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One of the arguments made on behalf of mainstream publishers in the Amazon-Hachette war is that publishers act as gatekeepers — keeping the junk out of the market and using their editorial skills to improve the books they do let into the market.  Here’s a writer offering up a paean to these gatekeepers in the the pages of Publishers Weekly:

In a market of unlimited book options, how does an audience make choices? At the moment, most of that burden is carried by the book business. The publicity and marketing campaigns and cover designs and flap copy—the things that publishers do—are not just methods of selling books; they’re also readers’ main tools for discovering books. The same is true of the curating and merchandising in stores, and book coverage in the media. Without reviews, staff recommendations, and endcap displays, unlimited choices aren’t narrowed down—they’re overwhelming.

Second, if all books become cheap or free to readers, then writers are unlikely to earn much (if anything). Who will want to write if writing doesn’t pay?

Third, without the gatekeepers, those who do write will create books that are worse—and not just authors whose dormant genius must be drawn out by patient editors, but all authors. Every book that doesn’t first have to get past a gatekeeper or two, or 10, before being put in front of the public will be worse.

He then goes on to describe how much his manuscript was improved in the process of being submitted to agents and publishers.  Well, your mileage may vary; mine certainly did.  As I’ve mentioned elsewhere on this blog, the editorial support and advice I got while I was part of the mainstream publishing world ranged from trivial to nonexistent.  Editors didn’t have the time or the interest or the talent to make my novels better.

Two further points.  First, the main idea behind being a gatekeeper is to keep out the bad stuff. But of course fallible human beings are making judgments that could well be wrong.  The most poignant case of this was John Kennedy Toole’s amazing A Confederacy of Dunces, shunned by mainstream publishers and only published by an obscure university press years after his suicide at the age of 31.

Less poignant, but of more immediate interest to me, is my novel The Portal, which my agent several years ago declined to market, deeming it unpublishable.  So now it’s out there in the self-published universe, and the rave customer reviews are starting to pile up.  Here’s one of many:

A Terrific Read! I wasn’t sure what to expect when I started reading this. Would the promising story idea deflate once it got past the initial set-up, as so many other books do? It definitely did not, and stayed entertaining all the way through – I could not put it down. I have kids around the same age and I really felt for these boys – they’re lost and are doing whatever they can to stay alive, stay together and hopefully get home. Glad the book was complete in itself, but it would be great to see them have more adventures like this. Overall, two very enthusiastic thumbs up!

(The semi-poignant part of this saga is that in the years after my agent rejected it I managed to lose the final draft — no hard copy, no soft copy.  Luckily, my friend Jeff managed to hang on to the final Word file.  Apparently he had more faith in it than I did!)

The second point is that gatekeepers are going to let stuff through that they shouldn’t.  Not all books that come out from major publishers are worth reading, or are as good as they could possibly be. The two most recent Jack Reacher books could certainly have been improved — one by going through another draft, the other by being tossed into the wastebasket.  But apparently the publisher doesn’t care — they just want a Jack Reacher book every year.

I don’t know anything about Emma Donoghue, but her latest novel, Frog Music, is a historical mystery and apparently very different from her previous “worldwide bestseller,” Room.  The Boston Globe hated it, the New York Times hated it, and lots of Amazon and (especially) Barnes & Noble customers also hate it.  My guess is that her publisher, Little Brown (part of Hachette), was hoping for another Room, but this is what the author delivered to them.  So they were stuck publishing something they didn’t much like.  (Also, the Kindle version costs $12.99, which suggests that the e-book pricing wars haven’t quite started yet — it’s actually a buck cheaper at B&N.  So I’d just like to mention that you can buy pretty much all of my e-books for the price of one Frog Music.)

Thoughts on Amazon vs. Hachette

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Amazon is apparently playing hardball in negotiations with the publishing conglomerate Hachette, and as usual people are outraged.  As usual, I find it hard to understand what the problem is.  Certainly some Hachette authors will be hurt in the short run, but that’s not really Amazon’s concern.  Authors are always buffeted by changes in the marketplace. There is certainly a possibility that Amazon will become something of a monopsony — the only place to which publishers can sell their books.  But the remedy here is legal, not calling Jeff Bezos an extortionist.

Joe Nocera of the New York Times sums things up like this:

No matter what you think of Amazon’s tactics, they surely don’t violate any laws. It is acting the way hardheaded companies usually act — inflicting some pain on the party in a dispute to move it toward resolution. On some level, the book industry has never fit comfortably in the contours of big business. But over the years, as one house after another was bought by conglomerates, as they merged with each other, as they tried to increase profits with the kind of regularity that pleases Wall Street, they began the process of commoditizing books.

Jeff Bezos? He’s only taking that process to its logical extreme.

One other thing: Nocera mentions Walmart and cable companies as examples of big companies that squeeze its suppliers.  But books are not fungible, the way air conditioners and other things you buy at Walmart are; if you want J.K. Rowling’s latest book, you’re not going to accept a substitute.  And there are way more suppliers for books than there are cable providers for your home.  If Amazon makes it hard for you to buy a Hachette book, Barnes & Noble will happily take your order — and, if they have any brains, they’ll give you a special discount.

The only issue here is that Kindle users are more or less tied to Amazon for their e-books.  But if they find that they can’t get a lot of their favorite titles on the Kindle, maybe they’ll buy a different e-reader.  This is no different from Netflix, which has a large but incomplete selection of movies and TV shows to stream.  If their selection doesn’t satisfy you, you have to go to Hulu or some other vendor.  Not having their books available from every conceivable bookseller is not great for authors and their readers, but it’s also not the end of the world.

When it comes to customer reviews, it’s quantity, not quality, that counts

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My publisher asked an analytics firm to study their sales data and determine the key factor that determines sales.  Here’s what they came up with:

When all the basics are covered, the number one factor determining sales is, without question, the number of reviews (not stars, but reviews). The more reviews, the more sales. In other words, “people are interested in buying what other people are interested in reviewing”. This is the basic definition of Social Engagement.

(The basics include a commercially viable book, a good cover, wide distribution, and good sales copy.)

I find this a bit hard to believe in its starkest form — if a book has 800 reviews that all say it stinks, I’m not going to buy it, and I don’t think you would, either.  But it makes sense as a rule of thumb.  So please review my books!  It doesn’t take long!  On Barnes & Noble, you don’t even have to say anything!  If you hate one of my books, I promise to do better next time!

My publisher also suggests that authors leave polite comments in response to reviews.

By establishing your presence among reviewers you accomplish several things.

1.    Your presence will temper reviewer responses because readers see that you’re watching.

2.    Reviewers will be anxious to leave a favorable review because they want you to talk to them (and they’ll expect it too, so consistency is key).

3.    If you create a reputation for talking to readers, they will talk back to you and (mostly) say nice things.

Overall, this back-and-forth effort creates social engagement, which increases reviews, which creates curiosity, which leads to sales and more reviews, which leads to more social engagement, all of which can lead to even more sales.

I didn’t know you could do this!  I actually can’t figure out how to it works on Barnes & Noble, but it’s easy enough on Amazon.  So if you leave me a review on Amazon, I will actually talk to you!  And if that isn’t exciting, I don’t know what is.

Robot price wars — or, why does someone think my novel is worth $2425.70?

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In his comment on the previous post, Jeff Carver pointed me to this article from a couple of years ago about an Amazon seller that charged $23 million dollars for an obscure academic book.

Eisen watched the robot price war from April 8 to 18 and calculated that two booksellers were automatically adjusting their prices against each other.

One equation kept setting the price of the first book at 1.27059 times the price of the second book, according to Eisen’s analysis, which is posted in detail on his blog.

The other equation automatically set its price at 0.9983 times the price of the other book. So the prices of the two books escalated in tandem into the millions, with the second book always selling for slightly less than the first. (Not that that matters much when you’re selling a book about flies for millions of dollars).

The incident highlights a little-known fact about e-commerce sites such as Amazon: Often, people don’t create and update prices; computer algorithms do.

I haven’t paid much attention to this sort of thing, since my old books are out of print, and I don’t get any royalties from their sales.  But this got me to take a look at their current prices, and it turns out that you can pick up what’s described as a new hardcover copy of my novel Senator for a mere $2425.70.  I love the extra 70 cents tacked on at the end.  (The book described in the CNN article currently tops out at $9899.00.)

But the “robot price war” explanation for the $23,000,000 book about insect development can’t explain the weird price for Senator, or the equally absurd price I spotted yesterday for The Portal. In both cases, there were no competitive prices — no other “new” hardcovers of Senator, no other used copies of The Portal.  So there has to be something else going on — either bad software, or stupid humans.  Or, I suppose, both.

One final note on my Print on Demand venture

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Ordered a carton of The Portal from my publisher last Saturday.  Lightning Source (the POD vendor) shipped the books on Wednesday.  They arrived on Friday.  Now they’re clogging up my kid’s empty bedroom while he’s off in the snowy Middle East.

There are now six vendors (besides Amazon) offering it for sale on the Amazon site. They’re all undercutting Amazon’s price of $14.10, but they all charge $3.99 for shipping/handling; you get free shipping from Amazon if you’re a Prime member. One vendor is offering a used copy, in good condition, for $999.11.  I wrote the book, and even I think that’s a bit excessive.

If you want one of mine, let me know.

Print on Demand pricing

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One thing I’ve noticed in my brief experience with Print on Demand publishing: Amazon seems to vary its pricing constantly.  The list price of the book (set by my publisher) is $15.99.  When I bought the book from Amazon last Saturday, it cost me about $15.50.  When it arrived on Wednesday, I checked, and Amazon was charging $12.89.  Today they’re charging $14.39.  Meanwhile other vendors (available via Amazon) are charging from $12.04 to $13.55 (plus $3.99 shipping and handling).  Barnes & Noble is charging $12.89.  It’s entirely possible that I’m the only one who has bought the book so far, and that is somehow making Amazon decide to raise its price.  Come on, people!

Every vendor is claiming that the book is “in stock.”  What that means in this context, I suppose, is that they have access to the book via Lightning Source, the book manufacturer.  They obviously don’t have the physical book on their shelves.

By the way, the unit cost my publisher will charge me is $5.77 per book, plus shipping and handling.  The cost to me for a carton (24 books) comes out to $7.77 per book.

I was sorta hoping the book would be available via Paige M. Gutenborg, the POD machine at Harvard Bookstore in Cambridge. Alas, she only seems to handle books from Google Books. Here’s what Paige looks like: