hachette

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We’re authors, damnit, not mathers.

Using Amazon’s latest proposal, the author would sell 174,000 ebooks and be paid 35% of revenue, earning $608,300. That amounts to $41,700 less than selling 100,000 ebooks at $13.00 per unit wholesale. Just to break even with their pre-agency revenue, then, an author has to sell 85.7% more ebooks than before, not 74%. And you must remember the 74% is an average increase in sales, which means not everyone will achieve this. Amazon, however, are guaranteed revenues of $521,478 on 174,000 ebooks priced at $9.99.

–M. A. Demers unpacks Amazon’s math.

Note she’s specifically referring here to a proposal from Amazon, released during the Amazon/Hachette contract kerfuffle.1

Demers’ description of the machinations between Amazon, the Big 5, and Apple are also interesting, giving some background on how exactly we got to where we are today.

I think the take-home, however, is that book pricing is enormously complicated, which means it’s very difficult for someone outside the industry (hell, even people inside the industry) to do the calculations working out the relationship between what a reader pays for a title and what an author receives. Companies like Amazon can then take advantage of this by proposing “simple” formulas, a la their 35/35/30, which make it seem like they’re being generous and self-sacrificing.

Yeah, well. Protip: companies don’t get to the size of Amazon (or Hachette, or Apple, for that matter) by being “generous and self-sacrificing”, that’s for sure.

  1. That really needs a ‘ship name, in my opinion. Amette? Hachazon? Forest Axe? Hm… []
2017-11-16T11:25:42+11:0024th September, 2014|Tags: amazon, hachette, publishing|

Price war.

[If Amazon forces traditional publishers to max out ebook prices at $9.99, self-publishing] will find one of its more notable advantages undercut. When $9.99 is the top cost for trad-pub e-books, you’ll see debuts and unknown authors drift to less than that, and those prices will encroach upon territory presently owned by author-publishers. The prices in self-publishing have been drifting upward. If this window tightens for larger publishers, self-publishers will need to move back downward into some kind of pricing oubliette. So will mid-list authors, debut authors, and unknown authors.

–Chuck Wendig on ebook pricing.

Maybe by the time this post gets off the queue the Amazon-Hachette dispute will be resolved (hah!). Anyway, some thoughts:

  1. It’s generally thought to be in the publisher’s interest to keep ebook and print book prices similar-ish. There’s some debate around this, but it still seems that print is overall more profitable for publishers (and authors) then digital alone. Either way, some of the costs of print are sunk no matter the size of the run, meaning any one printed title needs to sell x amount to make return.1 Digital eating bigger slices of the print pie is a threat to this and, in the long run, it’ll mean getting into print will be harder and harder for anyone other than Big Name Authors.
  2. Amazon has the inverse incentive; for them, ebooks are the sunk cost, with that cost being the development and maintenance of the Kindle platform (hardware and software). For Amazon, all ebook sales take are minuscule amounts of storage and bandwidth, compared to the whole rigmarole of warehousing, packing, and shipping that print books require.
  3. Readers just want cheaper books in general. And perhaps new books by new authors. Maybe. Not so sure about that one sometimes.2
  4. Authors want more money so we can quit our day jobs and write full time.
  5. Traditionally published authors want bigger cuts of digital revenue, it’s true. Some publishers (mostly romance, that I’m aware of) do offer this. It’s also worth pointing out that, when my own publisher tried to offer a different royalty model, they were absolutely excoriated for it by the genre establishment. I still can’t join the SFWA, for example, because Hydra’s 50/50 profit split contract mean it isn’t considered a paying market.3
  6. Self-published authors want… er… Actually I have no idea what the selfpub horse in this race really is, other than maybe making nyaah nyaah nyaah faces at Hachette? It would seem to me that maybe selfpub really shouldn’t want tradpub stepping in on its $2.99-9.99 pricing turf, which of course tradpub already is, ref. not just yours truly but also OP Mr. Wendig’s publisher, Angry Robot. I can’t speak for Wendig, but I know at least seven people other than myself have done work on Liesmith; the editor, the cover artist, the publicist, the marketing lady, the copyeditor, the layout editor, and my agent. Some of those costs are more sunk than others, but it’s not like I was paying for the poster and the vendor booth at SDCC out of my own pocket, either. Point being that, unlike price, these extraneous things are not services most debut selfpubbers can afford. Whether or not they make the book “better” than a self-published title is debatable and something I’ll perhaps leave up to others to decide. But what all that extra money does buy is exposure. Which matters. It’s not everything and it’s not magic, but it does matter.

Tl;dr, it’s in Amazon’s financial interests to shift book buying from physical to digital as much as possible. Readers just want books. And authors just want to get paid.

  1. Digital does as well, of course, but the x can be smaller. Note that’s “can”, not “is in 100% of all cases”. []
  2. I’m as guilty of this as anyone. I’m trying to do better. []
  3. Hydra also offers a “traditional”, 25/75-with-advance contract, which it did arguably just to appease the SFWA. It didn’t work. They’re still blacklisted. []
2017-07-17T11:05:51+11:0014th September, 2014|Tags: amazon, chuck wendig, hachette, publishing, self-publishing|

Publishing lock-in.

It is precisely because Hachette has been so successful in selling its ebooks through Amazon that it can’t afford to walk away from the retailer. By allowing Amazon to put a lock on its products whose key only Amazon possessed, Hachette has allowed Amazon to utterly usurp its relationship with its customers. The law of DRM means that neither the writer who created a book, nor the publisher who invested in it, gets to control its digital destiny: the lion’s share of copyright control goes to the ebook retailer whose sole contribution to the book was running it through a formatting script that locked it up with Amazon’s DRM.

The more books Hachette sold with Amazon DRM, the more its customers would have to give up to follow it to a competing store.

–Cory Doctorow on the DRM own goal.

DRM is promoted as locking a purchase to a customer. What it actually does is lock a customer to a retailer.

2018-04-27T13:48:48+11:0010th August, 2014|Tags: amazon, books, business, cory doctorow, drm, ebooks, hachette, kindle, publishing|