Why I Support Hachette Against Amazon - And Why You Should Too

I support Hachette because, frankly, I don't trust Amazon. Amazon throws its weight around to the detriment of authors and publishers, and offering the company more power is not a good thing. Amazon has repeatedly disregarded my concerns (multiple departments, multiple issues) and has shown that it does not in fact value its authors/publishers.

I may depend on Amazon, and I may get a lot of value out of the company, but I don't like the way they do business.

The Back Story

Amazon essentially forces all ebooks to be priced below $10 [1], by dropping the royalties from 70% on books under $10 to 35% on books greater than $10.

A small number of publishers, Hachette included, used their power to negotiate different terms with Amazon.

Now, Amazon wants to take this pricing power away from the publishers, to push them back down to $9.99 ebooks.

To gain leverage, Amazon took things a step further and intentionally prevented the sale of the publisher's physical books (keeping low inventory, etc.). 

Yes, Amazon in general is a net win for publishers, readers, and writers - but that doesn't mean they're doing the right thing.

Amazon holds immense power in the publishing industry - power that it misuses. A few examples:

  • I can't price my book at anything above $10 [1]. This might be a reasonable price for a fiction book, but it's not for a business book / textbook. As a result, my royalties are much lower on a ebook sales than on paperback. Doesn't that strike you as a bit strange?
  • Amazon prevented the sale of Hachette's physical books as a punitive measure, to the detriment of basically everyone.
  • Amazon's KDP Select program offers 70% royalties in Japan, Mexico, and Brazil - but only if I give Amazon exclusive rights. No iBooks or PDF sales. This is a move to damage competitors and gain more power, and it hurts everyone but Amazon.

Of course Amazon is a powerful tool for publishers and writers, but that doesn't mean everything they do is okay.

Amazon has a scary amount of power. They should have less, not more.

Amazon just doesn't value authors.

I laugh whenever I hear Amazon say that it values authors. No, it doesn't.

Essentially every time I've raised a concern about something at Amazon, I've been blown off. The only way I've ever gotten issues resolved is by using friends who work at Amazon. It kinda-sorta works for me, but sure doesn't signal good things for other authors.

Some of these issues have been:

  • Amazon Canada ordering comically few copies of my book, resulting in frequently out of stock inventory.
  • Finding networks of fake reviews designed to promote other books (e.g., "Gayle's book was great, but this other book was even better").
  • Finding an "author" who has released 200 "books" in the last year, all of which are copy/pastes of other books.

Each and every time, Amazon has blown off my concerns. (And this was not due to lack of evidence on my part.) Valuing authors means actually investigating when there's a concern, and Amazon[2] does not do that.

We need publishers. 

Publishers aren't perfect, but they serve a really valuable function. They take care of the editing, layout, cover design, marketing [somewhat], and other tasks. These are tasks that writers, by and large, can't and shouldn't do.

To label publishers as some relic of the past is very off-base. Publishers are valuable, and they're struggling. Amazon would love nothing more than to squash publishers completely, and thereby hold all the power.

Amazon's pricing argument is flawed.

Amazon argues that, basically, all ebooks should be $9.99 or less, because that's the Amazon-determined "fair" price. Amazon's argument goes:

  1. Publishers sell 1.74 books at $9.99 than at $14.99, so $9.99 is a more profitable price for the publisher/author anyway.

    If that were that simple, the publishers wouldn't be objecting so much to this pricing. The reality is that while some books might sell much better at $9.99, some books won't. 
  2. Ebooks have limited costs involved in their production, so they should cost less.

    Do you also expect software to be super cheap, because it's digital? Since when is cost of raw materials the determining factor of pricing?

    Physical books are actually not that expensive to print. Printing a typical paperback book is probably $4, when printed on demand. (Printed in bulk it's even cheaper, but then you have potential issues with over-production.)

    Books are expensive because there's a heck of a lot of work that goes into the finished product, even if not the raw materials. And because if you don't compensate people for that effort, it doesn't get produced at all.

Frankly, Amazon knows that their pricing arguments are weak. They want $9.99 pricing for business reasons - not for the benefit of readers, writers, or publishers.

Not all books should be $9.99.

Should all shirts be the same price? What about all keyboards? Sunglasses? Beers? Games? Paintings?

If you force all books to be priced at $9.99, you'll lose out on a lot of books. 

  • An author of a technical/business book will never have a movie made from their book (bye bye lucrative movie deals!). Shouldn't they be able to compensate for losing a revenue source?
  • An author of technical/business is unlikely to ever have a runaway success. With a much smaller market size, you need to charge more for it to make sense to pursue a product line.
  • An author of a technical/business book is typically already employed in another line of work. Want them someone awesome to write a book? You have to compensate them for the time they're not spending doing their real job.
  • Many technical/business authors do not especially enjoy writing (that's why they're not full-time writers). If you want someone to do something unenjoyable, you're going to have to pay them for it.
  • Whereas fiction books provide entertainment and artistic value, technical/business books provide financial value. I'll happily pay $200 for a piece of software that makes me $1000. Why shouldn't this apply to books?

The point is that not all books and all authors are the same. Pricing is not about "fairness." It's about what you have to pay to get certain results [3]. 

Amazon is ignoring all this and saying: if book, then $9.99.

Publishers/author might not always price their book optimally, but they're likely to be better than Amazon's one-size-fits-all price. Publishers/authors should have the freedom to price their book how they want, and that's why I support Hachette. 

Some further reading:

Please comment below with your thoughts or additional useful articles.

[1] Technically, you can price your book above $10, but that's not a reasonable option. The royalty on a $10 book are the same as on a $20 ebook, so $20 is out. And, obviously, you're not going to price your ebook at $30 to earn just slightly more per book than you would at $10.

[2] The only exception to this has been CreateSpace. Createspace has shown that it really values authors.

[3] To give a very real example: because of Amazon's bad policies around royalties, Cracking the Coding Interview - Amazon's best selling interview book - is not available on Kindle. Why should I when the Kindle royalties are so terrible compared with paperback?