Urgh. Amazon really IS taking over the world.

thothguard51 · Oct 14, 2011

One of my concerns with the Amazon = publisher is the terms of any agreement, especially since they can keep a book in print or e-book available forever.

I would also like to see how selective Amazon is going to be before I would consider signing with them. We all know anyone can self publish on kindle or Createspace, talent be damned. But if Amazon is going to get books into bookstores, I think they are going to have to be selective. Bookstores are not going to just stock their shelves with anything Amazon throws at them, IMO...

Does anyone recall where Amazon stood during the whole Google Books settlement lawsuit?

Old Hack · Oct 14, 2011

I don't remember, I'm afraid. But I would advise anyone signing up with Amazon's trade publishing arm to make sure that they have a very good agent representing them if they want to get a decent contract out of it.

kaitie · Oct 17, 2011

Here's a new article on the topic I found linked on Nathan's blog this morning.

Torgo · Oct 17, 2011

richcapo said:
One positive about the Amazon thing: Might light a fire under other publishers' assess to bring more new blood into the game. I'd sure like that.

Anecdotally, the children's fiction team here's acquired about six debut novels over the last six months. The picture books team, probably more.

We're constantly bringing new blood in, and we never get any credit for it. As ever. You buy ONE book by Katie Price, though, and watch the 7-page threads spring up... (You know that old joke about the guy who gets no respect in his village?)

strictlytopsecret · Oct 17, 2011

kaitie said:
Here's a new article on the topic I found linked on Nathan's blog this morning.

Great article.

Loved the following quote from it:

“The only really necessary people in the publishing process now are the writer and reader,” he said. “Everyone who stands between those two has both risk and opportunity.”

~STS~

Torgo · Oct 17, 2011

“The only really necessary people in the publishing process now are the writer and reader,”

Enjoy your brave new world, people! Don't come crying to me when it isn't quite what you expected...

Phaeal · Oct 17, 2011

What I took away from the NYT article:

If ONE MORE PERSON publishes a book titled "The Blankety-Blank's Daughter (Wife/Mother/Aunt/Other Female Relation)," I'm going to...to...well, I'll think of something. Or I'll ask my father/brother/uncle/son.

If Jane Austen were alive today, I guess we'd be reading, "Mr. Woodhouse's Daughter" instead of "Emma." Or, even better, "The Annoying Old Invalid's Daughter."

:Soapbox:

off.

Hmm, what? Amazon? Just keep following Mulder's Law: "Trust no one." The ethics of running commercial and self-publishing concerns side by side do deserve some examination.

Old Hack · Oct 17, 2011

Torgo said:
Anecdotally, the children's fiction team here's acquired about six debut novels over the last six months. The picture books team, probably more.

We're constantly bringing new blood in, and we never get any credit for it. As ever. You buy ONE book by Katie Price, though, and watch the 7-page threads spring up... (You know that old joke about the guy who gets no respect in his village?)

I know. It is so frustrating.

“The only really necessary people in the publishing process now are the writer and reader,” he said. “Everyone who stands between those two has both risk and opportunity.”

Empty rhetoric. Again, frustrating.

kaitie · Oct 17, 2011

Agreeing on empty rhetoric. I could go into why but I'm working on a migraine right now and functioning is limited.

In any case, it brought up some new interesting facts I hadn't been aware of, none of which made me feel any better about it.

Did anyone else think it very odd that Amazon had a non-disclosure clause in their contract? Or that they won't discuss how many editors they have or how many books they're planning to release? Or that the self-published person Amazon picked up wasn't paid an advance?

Should we take that to mean the advances are only offered to the people big enough to justify luring away from their publisher? I think considering most of us are in the low ranks, it's worth paying attention to that little detail.

Final thought: I also find it very interesting that Amazon was picking up self-publishers. I guess the idea is that if the self-published person does well enough Amazon is considering offering them a "real" contract and editing services and what not.

Here's my question (not that it can be answered because of that pesky non-disclosure clause): If a person makes 70% of profits on a book and Amazon gets 30% when they self-publish, and then Amazon is able to go and pick off those people who are succeeding and selling better, is Amazon then getting a higher percentage of the cut? Let's say, oh, 75% (didn't the contract just signed agree to 25% royalties for the author?), isn't that something authors should be seriously looking into and considering?

James D. Macdonald · Oct 17, 2011

A monopoly only benefits the monopolist.

Charlie and Candy Mountain is still a great metaphor.

Manuel Royal · Oct 17, 2011

strictlytopsecret said:
Great article.

Loved the following quote from it:

“The only really necessary people in the publishing process now are the writer and reader,” he said. “Everyone who stands between those two has both risk and opportunity.”

~STS~

Those are the only two people necessary, unless the reader likes his books properly edited, with some assurance of professional quality before he buys. I kind of like that.

bearilou · Oct 19, 2011

Of the entire discussion, and some very good points raised, this is what sticks out in my head the clearest.

kaitie said:
And considering some of Amazon's actions in the past, I don't particularly trust them.

Indeed. They've pulled some seriously bone-headed decisions, decisions that had gone on to cause quite the stir.

I am skeptical, will continue to be so and will wait patiently to see the 'quality' of product they provide. Considering we know nothing of their editing staff and their qualifications or their process or if there is even a process... :Shrug:

kaitie · Oct 19, 2011

That's part of what makes me uncertain. They aren't releasing any information about any of that, including the number of editors that they have. It also sounds like they've ramped up production to be considered on par with other publishers. I'd like to see the quality they are able to provide.

speakinghands · Oct 20, 2011

It's not like Nike stores where they sell their own Nike sneakers or the grocery store selling its own cheap generic apple juice. Books are not just physical or consumptive items; they also contain information and ideas.

I'm up absurdly late so I hope I articulate this okay, but where this is potentially scary is... it's like what happened with news in the nineties. During Clinton's/Gingrich's tenure, the law forbidding companies from owning different types of media was overturned. The piss-poor echo chamber we have today - where news items are commonly ignored or made up to suit particular political agendas - is largely a result of that. News outlets don't have to be nearly as careful because there aren't a butt ton of other sources ready to call them on it, since now they're all owned by the same four or so companies. (Like, if you watch Fox News and you read WaPo, how do you find out when they report something false? Or don't report something that's newsworthy? You don't.) Information integrity has suffered tremendously. A book seller that is also the distributor that is also the publisher smacks of potential problems like those. The only potential saving grace is that people are so much more wired today that the consumer has a lot more control.

Phaeal said:
If ONE MORE PERSON publishes a book titled "The Blankety-Blank's Daughter (Wife/Mother/Aunt/Other Female Relation)," I'm going to...to...well, I'll think of something. Or I'll ask my father/brother/uncle/son.

If Jane Austen were alive today, I guess we'd be reading, "Mr. Woodhouse's Daughter" instead of "Emma." Or, even better, "The Annoying Old Invalid's Daughter."

GAH where does this COME from? My guess is that it's a marketing ploy of publishers to appeal to certain demographics: "The ____'s Daughter/Wife/Mother" says "This is a novel with women in it, and it is about relationships. But not romance."

rainsmom · Oct 20, 2011

It may be inappropriate for me to post this link here. Mods, feel free to delete, if I've broken a rule.

I wrote a long blog post about my feelings toward this Amazon publishing venture. I'd love your thoughts.

http://melissa-c-alexander.com/2011/10/is-amazon-publishing-good-for-writers/

Cyia · Oct 20, 2011

http://aardvarknow.us/2011/10/19/really-new-york-times/

Publishing folk remember that over a year ago Amazon punitively stopped selling all books, print or electronic, from Macmillan Publishing when Macmillanwas the first to change its selling terms to stop Amazon from pricing e-books below cost. Amazon was choosing to lose $2-5 per copy on the most popular books it sold, which gave it a virtual monopoly on e-book sales. No other book retailer could have afforded to lose so much money on e-books, so Amazon was on its way to becoming the only player in the game. Until Macmillan did a little David vs. Goliath act of its own—and Amazon blinked.

The point is: Amazon is so big it can afford to take losses on certain segments of its business as long as the overall business is healthy. They are brilliant strategists. They were very smartly willing to take a loss on some e-book sales to offer great prices and cement their place with consumers as the only e-book store worth visiting. Sadly for the publishing industry, no other retailer of books has such deep pockets and can afford to do what they do. Everyone else needs positive income from the books they sell to stay in business. And the same is true of publishers.

speakinghands · Oct 20, 2011

Publishing folk remember that over a year ago Amazon punitively stopped selling all books, print or electronic, from Macmillan Publishing when Macmillanwas the first to change its selling terms to stop Amazon from pricing e-books below cost. Amazon was choosing to lose $2-5 per copy on the most popular books it sold, which gave it a virtual monopoly on e-book sales.

I just don't understand how this is possible. I remember before Amazon's war with publishers, e-books were roughly 2/3 to 3/4 the price of a physical copy from a brick-and-mortar bookstore, except for hardback bestsellers, which were a little over 1/3 the listing cost but between 1/2 and 2/3 the discounted price customers paid for physical copies at the large bookstore chains. But e-books don't have to be typeset, printed, bound, shipped, inventoried, distributed, etc. They don't have to sit in heated and cooled bookstores with employees being paid to ring them up and buildings incurring property taxes and insurance and maintenance to house them.

I have a really hard time believing all the above variable costs don't amount to 1/4 to 1/3. If Amazon was losing money on its new bestseller e-books, then all the large bookstore chains have been losing money - probably more than $2 to $5 - on new bestseller hardbacks for years. Come to think of it...

Xelebes · Oct 20, 2011

speakinghands said:
I just don't understand how this is possible. I remember before Amazon's war with publishers, e-books were roughly 2/3 to 3/4 the price of a physical copy from a brick-and-mortar bookstore, except for hardback bestsellers, which were a little over 1/3 the listing cost but between 1/2 and 2/3 the discounted price customers paid for physical copies at the large bookstore chains. But e-books don't have to be typeset, printed, bound, shipped, inventoried, distributed, etc. They don't have to sit in heated and cooled bookstores with employees being paid to ring them up and buildings incurring property taxes and insurance and maintenance to house them.

I have a really hard time believing all the above variable costs don't amount to 1/4 to 1/3. If Amazon was losing money on its new bestseller e-books, then all the large bookstore chains have been losing money - probably more than $2 to $5 - on new bestseller hardbacks for years. Come to think of it...

A lot of it is overhead. If you only sell 10 000 copies but it cost 50 000 dollars of editing and marketing, that's 5 dollars per book. There are also other fixed costs including the holding of the digital copy, holding the digital copy for sale and the whole storefront.

kaitie · Oct 20, 2011

speakinghands said:
I just don't understand how this is possible. I remember before Amazon's war with publishers, e-books were roughly 2/3 to 3/4 the price of a physical copy from a brick-and-mortar bookstore, except for hardback bestsellers, which were a little over 1/3 the listing cost but between 1/2 and 2/3 the discounted price customers paid for physical copies at the large bookstore chains. But e-books don't have to be typeset, printed, bound, shipped, inventoried, distributed, etc. They don't have to sit in heated and cooled bookstores with employees being paid to ring them up and buildings incurring property taxes and insurance and maintenance to house them.

I have a really hard time believing all the above variable costs don't amount to 1/4 to 1/3. If Amazon was losing money on its new bestseller e-books, then all the large bookstore chains have been losing money - probably more than $2 to $5 - on new bestseller hardbacks for years. Come to think of it...

Here's a couple of good links to read on the subject. Printing, etc. only costs about $2.00 per book. Also keep in mind that in it's place ebooks have to be formatted for various electronic formats and stored, even if it is on a server as opposed to a warehouse.

http://blog.nathanbransford.com/2010/02/what-should-e-book-cost.html

http://blog.nathanbransford.com/2011/03/why-some-e-books-cost-more-than.html

Terie · Oct 20, 2011

kaitie said:
Also keep in mind that in it's place ebooks have to be formatted for various electronic formats and stored, even if it is on a server as opposed to a warehouse.

And tested for quality assurance. In multiple formats on multiple devices.

People seem to keep forgetting that e-books are software and require the same rigorous testing that software does before release into the wild. It might not take all that long to properly test a single e-book, but publishers have multiple releases every single day, not just a single book every few weeks or months. And that's not counting the backlists they're trying to get out the door at the same time they're working on current releases.

Torgo · Oct 21, 2011

speakinghands said:
I just don't understand how this is possible. I remember before Amazon's war with publishers, e-books were roughly 2/3 to 3/4 the price of a physical copy from a brick-and-mortar bookstore, except for hardback bestsellers, which were a little over 1/3 the listing cost but between 1/2 and 2/3 the discounted price customers paid for physical copies at the large bookstore chains. But e-books don't have to be typeset, printed, bound, shipped, inventoried, distributed, etc. They don't have to sit in heated and cooled bookstores with employees being paid to ring them up and buildings incurring property taxes and insurance and maintenance to house them.

I have a really hard time believing all the above variable costs don't amount to 1/4 to 1/3. If Amazon was losing money on its new bestseller e-books, then all the large bookstore chains have been losing money - probably more than $2 to $5 - on new bestseller hardbacks for years. Come to think of it...

Remember that Amazon works on a reseller model, so that the price they sell ebooks for is not the price for which they buy them from the publisher. The publisher sets a recommended price, and sells them to Amazon at a discount from that. So, Amazon might buy a book at a 50% discount from £9.99, paying out about £5.

Amazon then decide that they want to sell the book to customers at around £5. They want to keep their ebooks cheaper than the competition by selling them at cost or even at a loss. This encourages the takeup of their Kindle platform, which now dominates the market.

The costs of ebook publishing are very different yes, but only after the point at which the book is typeset. You make the ebook from essentially the same file that gets sent to the printers. All the costs that the publisher has incurred in getting it to that point apply equally to both editions, including editing, marketing, etc.

After that, the print book incurs per-book costs. Each copy has to be printed, freighted, warehoused etc - the more copies you print and schlep about, the more you pay. The ebook incurs one-off, or plant costs - the conversion of the file, then quite possibly another proofread to check it's come out OK. These are all paid by the publisher, and impact on their profit margin.

I should also point out that with ebooks in the UK at least, the consumer has to pay 20% VAT, a cost that gets eaten by the publisher, and the author is quite likely to be on twice the royalty percentage for the same book in print. So there's quite a lot of margin going elsewhere. What all this means is that although ebooks can be pure profit for a publisher, requiring no printing or distribution, that's only after you've sold enough to cover all the setup costs. They don't represent a risk-free bonanza any more than print books do.

EDIT: I hope that makes sense. Sorry, kind of fuzzy this morning; drinking tea and trying to compose paragraphs to finally get my brain started.

kaitie · Oct 21, 2011

Terie said:
And tested for quality assurance. In multiple formats on multiple devices.

People seem to keep forgetting that e-books are software and require the same rigorous testing that software does before release into the wild. It might not take all that long to properly test a single e-book, but publishers have multiple releases every single day, not just a single book every few weeks or months. And that's not counting the backlists they're trying to get out the door at the same time they're working on current releases.

Is this a one-time or ongoing sort of expense? It seems like every couple of months there's a new device, and I wonder if publishers have to do more checking or formatting for each one, or if the file stays pretty much the same and it's the reader's job to play it correctly.

Torgo · Oct 21, 2011

kaitie said:
Is this a one-time or ongoing sort of expense? It seems like every couple of months there's a new device, and I wonder if publishers have to do more checking or formatting for each one, or if the file stays pretty much the same and it's the reader's job to play it correctly.

The latter, really. Multiple formats was a problem in the early days of ebooks but now everyone's really coalesced around the EPUB format. It's the only one we still produce. Amazon use a flavour of Mobipocket but we just send them the EPUB and they do the conversion, I believe.

Still, annoying issues do crop up. I did some illustrated books a while back that looked fine in Kindle Previewer, but when you looked at the file on an actual Kindle a bunch of pictures showed up as negative versions. (Some GIF compatibility issue, I think.) I had to pull them from Amazon and redo them; the lesson I learned was, test everything on as many different platforms as you can.

kaitie · Oct 21, 2011

Torgo said:
Remember that Amazon works on a reseller model, so that the price they sell ebooks for is not the price for which they buy them from the publisher. The publisher sets a recommended price, and sells them to Amazon at a discount from that. So, Amazon might buy a book at a 50% discount from £9.99, paying out about £5.

Amazon then decide that they want to sell the book to customers at around £5. They want to keep their ebooks cheaper than the competition by selling them at cost or even at a loss. This encourages the takeup of their Kindle platform, which now dominates the market.

The costs of ebook publishing are very different yes, but only after the point at which the book is typeset. You make the ebook from essentially the same file that gets sent to the printers. All the costs that the publisher has incurred in getting it to that point apply equally to both editions, including editing, marketing, etc.

After that, the print book incurs per-book costs. Each copy has to be printed, freighted, warehoused etc - the more copies you print and schlep about, the more you pay. The ebook incurs one-off, or plant costs - the conversion of the file, then quite possibly another proofread to check it's come out OK. These are all paid by the publisher, and impact on their profit margin.

I should also point out that with ebooks in the UK at least, the consumer has to pay 20% VAT, a cost that gets eaten by the publisher, and the author is quite likely to be on twice the royalty percentage for the same book in print. So there's quite a lot of margin going elsewhere. What all this means is that although ebooks can be pure profit for a publisher, requiring no printing or distribution, that's only after you've sold enough to cover all the setup costs. They don't represent a risk-free bonanza any more than print books do.

EDIT: I hope that makes sense. Sorry, kind of fuzzy this morning; drinking tea and trying to compose paragraphs to finally get my brain started.

While we're mentioning the pricing thing to get people to buy kindles, there's a side-effect that is also mentioned in Nathan's blog and is very noticeable if you look at the informal surveys he's done--it makes people expect an ebook to cost less.

Nathan did a survey two years apart while discussing these issues, and the first time he did it the majority of people said an ebook should cost around ten dollars, and the second it was around five (if I remember correctly). Not a truly scientific survey, but this was an audience of writers and people who should, theoretically, know better. Especially if they'd read his blog. But in one year the amount that the average random person thought an ebook should cost dropped by several dollars.

The big problem here, of course, is that when it drops too much, the publishers aren't able to make enough money to turn a profit.

Something else that just occurred to me is that with print runs, the more books are printed the cheaper it is to print. So if you think about it, while some massive bestsellers might still bring in a lot of sales in ebook form, it's possible publishers are also not getting that bit of hidden savings. I'm not sure if it's enough to really matter or not (I'm just speculating).

I don't remember where, might be in one of those links, but someone did a workup a year or so ago of what an ebook would have to cost in order to just break even for publishers and it was definitely more than most people were saying they thought it should be.

kaitie · Oct 21, 2011

Torgo said:
The latter, really. Multiple formats was a problem in the early days of ebooks but now everyone's really coalesced around the EPUB format. It's the only one we still produce. Amazon use a flavour of Mobipocket but we just send them the EPUB and they do the conversion, I believe.

Still, annoying issues do crop up. I did some illustrated books a while back that looked fine in Kindle Previewer, but when you looked at the file on an actual Kindle a bunch of pictures showed up as negative versions. (Some GIF compatibility issue, I think.) I had to pull them from Amazon and redo them; the lesson I learned was, test everything on as many different platforms as you can.

That's sort of what I thought. So basically the only time it might be an issue is if they went to a completely new format, but even then the seller could convert it themselves. Thanks for the answer.

Urgh. Amazon really IS taking over the world.

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