Saturday, July 12, 2014

Who Wins This War: You, Amazon or Hachette?

As this contract war—excuse me, negotiations— between Amazon and Hachette rolls on, what does this mean for you and me? For those of us who are merely readers and authors. Those of us who are not a part of the glittering heights of the publishing world. Many are characterizing this struggle as a battle between David and Goliath. I look at is as a struggle between two Goliaths.

Amazon fired another shot across the bow of the Hachette book publishing ship this week. While these two giants try to negotiate a contract—a heated contest which has drawn the interest of the entire publishing industry—Amazon suggested that both conglomerates give all Hachette authors 100% of the royalties from their digital sales until this dispute is resolved.

Hachette representatives called this suggestion financial “suicide.” Amazon counter that Hachette was full of “baloney,” claiming that Hachette’s $10 billion dollar annual revenue can easily afford this gesture.

Meanwhile, authors have been drawn into this fray.  The Washington Post reported that best-selling Hachette author Scott Turow—former president of the Authors Guild—characterized the offer as “little more than a publicity stunt.” Turow cautioned authors from accepting this blood money, although acknowledging that publishers brought this on themselves for not giving authors a fairer cut of the profits.

Bestselling author Doug Preston penned a letter of support for Hachette and asked authors to sign, claiming Amazon targeted Hachette authors to force the publisher to come to terms. Successful indie authors Joe Konrath, Barry Eisler, and Hugh C. Howey countered with a petition of their own directed toward readers, explaining the intent of Amazon and Hachette, and claiming Hachette—not Amazon—are the real culprits. Some 7,000 authors have signed this letter at last count. Preston’s letter has garnered close to 600 signatures, many of them top-selling writers in the business. (In the interest of full disclosure, I did sign the petition from Konrath et al.)

And so the war goes on.

Hachette was a co-defendant in the civil anti-trust suit, U.S. Department of Justice v. Apple Inc, that alleged Apple and five co-defendants entered into a conspiracy to raise eBook prices to consumers. The federal court slapped their hands, money was paid out, and now defendants like Hachette—free of the court ruling—must individually negotiate with Amazon and other eBooks retailers without the benefit of making a deal with Apple and other publishers that got them in hot water a few years ago.

Which brings us to today. The question I pose to you is who will win after the dust settles?

I imagine that Hachette and Amazon will enter into an agreement at some point that will benefit both parties. After all, it is a negotiation, right? And they are in the business to make money. Putting aside all the emotional terms being bantered back and forth—blood money, liberate, boycott, monopoly—it is all about the money and who stands to make the most.

Stating it simply, if Amazon wins, eBook prices will be lower and more consumers will save money on novels from bestselling authors. If Hachette wins, eBooks from their publishing house are expected to be kept high, and consumers will pay more for the same eBooks.

So what do readers and writers get out of this negotiation?

If you are one of Hachette’s bestselling authors and your publisher wins, you will continue to make less—percentage wise—than indie authors and the price of your novel will remain high. But who cares if you are an author like James Patterson (garnering $94 million last year) making big bucks. If youu are another Patterson—and Amazon wins—you might make more or less, depending upon whether more first-time readers are willing to  buy your novel at the lower price,  or Hachette changes the percentage you make on eBooks in your favor. It all depends if Hachette might be a little more reasonable and give their writers a bigger cut of the royalties on eBooks, but I would not hold my breath.

If you are a reader, you will most likely pay more for your eBooks if Hachette wins, and less for your eBooks if Amazon wins. As I see it, there might be a few variables that change this but the  bottom line—readers win if Amazon wins.

Lastly, there are writers like myself—indie authors whose largest chunk of income is derived from eBook sales. If Amazon wins, it will be like the status quo of the last few years. Legacy publishers will offer some books at a lower price (more competition for indie writers) but considerably higher than authors like myself. If Hachette wins, eBook prices will remain high with little or no discounts and we will sell more books.

As an indie author, I can’t seem to get too riled no matter who wins. In fact, if Hachette wins I think my odds of selling more books will rise. One of the key advantages of being an indie author is the ability to offer very competitive prices for your eBooks when legacy authors are stuck at the higher end. Wouldn’t you—the reader—be more tempted to buy five or six indie books and try them out for the same price of one Hachette’s bestselling author’s eBooks?

No matter who comes out ahead in this contract war, Amazon will continue to afford indie authors a viable market to sell their books in an environment that is structured for customer satisfaction. Amazon will continue to offer a very reasonable and fair royalty payment that is much higher than Hachette allows its writers. They will allow indie authors to release their novels as quickly as the author’s manuscripts are finished without having writers wait a year or two before publication. They will let the market decide who to buy, not a gatekeeper working for one of the legacy publishers.

Excuse me while I yawn as writers, Amazon & Hachette fired the next volley at each other. Some might think that I can not see the big picture. That I can't see where this will all lead. Give me a break! When this war is over, I will still be here, writing my next manuscript and reading a reasonably-priced novel from another indie author. Who knows, I might break down and buy an exorbitantly-priced novel from one of my favorite Hachette authors. In my world, when it comes down to it—nothing will have changed.

What about your world? Will it change anything?