Hachette v. Amazon: Whose Fault Is It, Anyway?

Amazon and Hachette are fighting over the fundamental pricing of books.If you’ve paid any attention to the book industry, you’ll know by now that Hachette and Amazon are locked in some kind of pricing battle.

The details aren’t that well known, but the strategy is: Amazon disabled the pre-order option for Hachette books, discounts have vanished and some authors have gone completely unlisted.

Meanwhile, Hachette just laid off 30 people (or, in The Wall Street Journal’s more dramatic terms, 3% of its US workforce). The reason? “Softening book sales.”

Hachette isn’t exactly a two-bit publisher. It’s part of a media conglomerate, Lagardère. Famous authors on the roster right now include JK Rowling, Steven Colbert, Malcolm Gladwell and James Patterson.

People don’t really know why Hachette and Amazon are having a stand-off. All they know is that they can’t get the publisher’s books as easily if they’re trying to buy from Amazon. But most speculate that it has something to do with discounting the prices of eBooks.

The real question, then, is this: how do we value books today? And what happens if publishers decide to not renew their contracts with Amazon?

The Renaissance Man

The current CEO of Hacette, Michael Pietsch, wasn’t always a business guy. He’s some hybrid of business-mainstream-literary. Years ago, he was the editor for David Foster Wallace’s “Infinite Jest.” More recently, he edited the Pulitzer Prize-winning “The Goldfinch.”

So when it comes down to how to price books, Pietsch’s opinion matters. But does it matter to Amazon?

In a statement, he summed the problem up pretty well:

“Amazon indicates that it considers books to be like any other consumer good,” he said. “They are not.”

I’m going to take this to mean that Amazon is rethinking how to price eBooks. You can usually get traditionally published eBooks for $10. That’s already much cheaper than a hardcover book. Meanwhile, Amazon is selling thousands and thousands of self-published books that range from $0 to $2.99.

If Amazon wants to keep prices low – or go even lower – Hachette’s entire infrastructure, built up over the years on certain price margins – will collapse. In part, we can see that already happening with this first round of lay-offs (which, some speculate, is why Amazon isn’t backing down – they’re hoping to kick Hachette while the publisher is already bleeding business).

Amazon’s point-of-view makes sense, from a logical perspective. An eBook doesn’t have a hardcover. A hardcover from Amazon doesn’t have the distribution costs that shipping to different bookstores may have.

So why should books stay the same price, if all the other costs have gone down? Why, in a world of one-click free downloads, should we pay more than a dollar or two for a book we read in line at the grocery store on our phone?

A Publisher’s Value Proposition: Books That Don’t Suck

Over the past few years, publishers have been recast as necessary gatekeepers to evil overlords, especially among indie authors. A lot of people question why these third-parties are even necessary in the creation and publication of a book now, anyway. If you can be a “published author” by clicking a few times, why should publishers exist at all?

Because publishers make sure that books don’t suck.

Indie authors don’t like to say the Q-word (“quality”), too loudly, but I think we’ve all tried to read some self-published works and been appalled at the writing. I’ve tried exactly three times and the experience has left me too scarred to try again. In fact, I recently just spent $60 on Countdown and The GoldFinch. 

Sixty dollars is worth two hardcover books or about six eBooks. But the time I waste reading a bad book is ultimately more expensive. 

The Quality Premium

I’m not the only one thinking about the quality difference – or should I say disparity – when it comes to published and self-published books. Lately, I’ve been getting more comments on my blog post about KDP Select that say that one of the biggest reasons indie authors don’t get traction is because their books aren’t great.

Says one “Jon”:

I’ve been reading threads like this one all day to get some idea of what KDP Select offers. What I find absolutely amazing is that not one (literally) would-be author complaining about his or her results seems willing to even consider that they might just be really bad at writing.

In fact, the whole idiotic conversation (here and elsewhere) proceeds on the assumption that the books in question are all sure-fire bestsellers in waiting, and that it’s only a question of whether or not the “system” is good enough. I would say that 90-95% of the self-published books on Amazon will fail to make the author a successful one because they’re not novels at all, but hobby horses masquerading as literature.

Or, just this week, a “Mr. James:”

1. Most self-published books are garbage. Period. Lackluster, uninspiring garbage. For every Jimmy Page and Mark Knopfler there are ten million tone deaf dilatants that own guitars. The average self-published book is a deluded attempt at emulating what is already out there, riddled with hopeless syntax, hollow characters, atrocious grammar, pre-school spelling, highly predictable plot threads, poor cover design, and Kung-Fu movie dialogue. There are over half a million books available from Amazon. Half a million!!! Try to name fifteen really good authors. I rest my case.
2. Most self-published authors are blind to the possibility that their work may just be too shit for anyone to want to read. This is human nature. I would estimate that 75% or more of the authors who go around ranting about the hardships of marketing and their exasperation with poor reader response are trying to sell something that few people in their right mind would be willing to waste money on.

Instead of thinking about this potential issue, however, many self-published authors instead blame publishers. They cast them as the evil gatekeepers who are oppressing people’s dreams.

The self-published books I’ve read have been bad enough for me to be very careful when selecting other ones. But then again, they’re cheaper. Inferior products or less well-branded products should be cheaper. 

Why aren’t publishers pushing this angle more? The differentiator between published books and self-published books is quality. Everyone knows this. Without the publishers doing the legwork to create great products, Amazon would only have $1 indie books to sell.

The Direct to Consumer Journey

Publishers are far from perfect. Amazon pays better royalties to authors. The company’s model is more adaptable. By all accounts, Amazon is also much better to do business with than the now-sympathetic Barnes & Noble.

It doesn’t take too much work to find out that things are not well within the publishing world. The model is breaking down in the digital landscape. The reason Amazon has so much power is because publishers failed to build a direct-to-consumer model fast enough.

There’s still time, because publishers have the supply. Build an eCommerce platform. Hire content marketers who can create digital momentum around new titles. Sell books directly and you can set the prices yourself.

I’ve been really skeptical about digital advertising for books, but mostly because the most visible digital advertising & marketing campaigns are always done by indie authors who are great marketers, but, in my experience, not as good at writing.

Is there really a difference between going to a bookstore and selecting one based on a one-page summary than reading a blog post about one? Or seeing a summary on Goodreads? Or Amazon?

There has to be, because I’m much more likely to buy a book based on the former experience than the latter. And pay more for it, too.

I guess that goes back to the fact that I still trust publishers’ judgement – and editing – in books more than I trust the quality of writing in indie titles. But if publishers don’t adapt soon and continue to allow Amazon more in the book market, then there really won’t be any need for a gatekeeper.

Not if all the titles end up on Amazon, anyway.



Photo Credit: JTeale via Compfight cc

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