Pay per page? Get Outta Here With That Nonsense

The following is my response to Amazon changing the payout terms for Kindle Unlimited borrows from a 10%, regardless-of-length full payout to a pay-per-page standard, as well as my response to the responses.

“Starting in July, if you’ve been loading the system with bits and pieces instead of full-fledged work, you’ll be getting paid for bits and pieces.”
— Porter Anderson from Thought Catalog

Hear that, writers of short works? Those of you who, apparently, are not quite full fledged? See what the industry thinks of you? You’re only worth bits and pieces compared with the vaunted novelists. You’re being thrust back to your rightful place on the pay scale, and you only get that begrudgingly.  A bit of an unfair characterization of Anderson’s words and meaning? Sure. But that comment is also characteristic of many, many more like it. Short works are a racket. You’re gaming the system. What you’re doing isn’t fair. This is a common sense return to sanity.

Even Hugh Howey got in on the act:

“What we should celebrate is that short stories will no longer earn the same amount as a novel, especially since the 10% threshold was much easier to reach on a short story. That system just wasn’t fair. The new system is a vast improvement.”
— Author Hugh Howey

A vast improvement for writers of long-form works who stand to grab a much larger portion of the proceeds. In other words, a vast improvement for the people who are not you. Just the fact that it’s not you is even cause for celebration. Feel the love yet? Another unfair bit of assumption? Certainly. Howey has written some short works himself, and I don’t think for a second he’d want to do anything to knowingly harm any writers. But you see enough of this baked in bias against the short form, you begin to realize how ingrained it is. Even many other writers who work short will fetishize the position of the novel in the hierarchy somewhere above you, if not in stature, than certainly in monetary terms. You might even be doing it yourself right now. It’s everywhere. Peruse the articles and comments on every one of the links here and drink whenever you see some variation of “fairness” or “level playing field” used in describing the new pay scale. I dare you. If you can make it through all of them still lucid enough to read, you many need to have your liver checked out soon. Or join a 12 step program.

As for the suggestion that it was so much easier for short works to reach that 10% threshold, it’s assuming a direct one-to-one correlation of the value of a page relative to the work. Is one page in Kafka’s Metamorphisis (53 pages long in mass market paperback length) truly equivalent to one page in Tolstoy’s War and Peace (1,424 pages) in effect, import to the story and impact on the reader? Strictly proportionally speaking, there’s 27 pages in that Russain doorstop for every one in Kafka’s “pamphlet”. Isn’t it fair to presume that each page of Kafka’s tale must necessarily have more bearing on the overall than one which has nearly half it’s total length per page to stretch out? (Incidentally, all the page counts I use in this piece will be MMPB for ease of comparison. It’s not perfect, but close enough for my purposes without having to decipher Amazon’s standard page length algorithm. You know, page length for the stuff appearing on a device that doesn’t have actual pages?)

Short works aren’t short novels. It’s a different form entirely, with a different structural makeup and it’s own unique set of characteristics. Was it fair that Leo would have to get a reader through 140 pages while Fraz had only to reach 5 to trigger a full payout? Why not? It’s the exact same relative percentage of the story at hand. And we are talking about stories here, right? Because for a second there, it seemed like we’d veered into suggesting monetary rewards based on the volume in an imaginary container. But  then, that would be silly.

But not so silly if you’re of the mind that the short form is an inherent lesser to the long form, based on the sheer weight of it alone. It doesn’t matter if the underlying story is more effective at it’s own aims. They might even both be equally effective, yet the novel is still granted superiority, more deserving of increased compensation simply because it’s longer. It’s an idea that’s enticing to side with, I agree, if we’re talking about an actual physical book, and all the accompanying costs of producing and distributing one. For an infinitely replicable digital file of near insignificant size displayed on a screen,  however, that complicates things. And if we discount reader bias having been conditioned in many ways to expect more volume at a higher price with, say, a totally digital, essentially a la carte subscription service for a flat rate monthly fee, well, then, we’ve now removed any semblance of a price-based purchase decision from the equation. What we still have, though, are the stories themselves, each in their own forms, existing in much more even economic conditions than maybe ever before. The presumption of the novel’s sheer length deserving additional reward is not quite so clear cut as it may at first appear.

Is there such a natural superiority to longer form work? After all, it is longer. There’s more room in there, so it must generate more value, right? Well, here’s some expert testimony on that subject:

“We allude to the short prose narrative, requiring from a half-hour to one or two hours in its perusal. The ordinary novel is objectionable, from its length…as it cannot be read at one sitting, it deprives itself, of course, of the immense force derivable from totality. Worldly interests intervening during the pauses of perusal, modify, annul, or counteract, in a greater or less degree, the impressions of the book. But simple cessation in reading, would, of itself, be sufficient to destroy the true unity. In the brief tale, however, the author is enabled to carry out the fullness of his intention, be it what it may. During the hour of perusal the soul of the reader is at the writer’s control. There are no external or extrinsic influences–resulting from weariness or interruption…by such means, with such care and skill, a picture is at length painted which leaves in the mind of him who contemplates it with a kindred art, a sense of the fullest satisfaction. The idea of the tale has been presented unblemished, because undisturbed; and this is an end unattainable by the novel.”
— Edgar Allan Poe from a review of Nathaniel Hawthorne’s Twice Told Tales

Yup, that’s American literary treasure Edgar Allan Poe stating his opinion that the novel’s length is actually a detriment to the story not an advantage. What would Poe think of this new pay scale being implemented by Amazon? I suspect it would be enough to send the lord of horror screaming off into the night. This from the man who basically invented the form, as well as a handful of fiction genres many of us work in to this day. His words just might carry a little weight, don’t you think? And not in “the story needs to be the size of a cinder block to engender fair compensation” sense.

So what brought about this alteration of pay by Amazon? In their own words:

“One particular piece of feedback we’ve heard consistently from authors is that paying the same for all books regardless of length may not provide a strong enough alignment between the interests of authors and readers.”
— statement from Amazon

Here’s how I put it in a tweet immediately after reading of the change:

“WTF does length of the work have to do with anything? Just some whiny ass novelists bitching on wanting paid extra for their fluffed up nonsense.”

and this one:

“Pay by the page? In a fucking ebook? Sure, that’s not some backwards ass nonsense to appease a bunch of overly verbose squeaky wheels.”

I was a bit annoyed, apparently. But Amazon’s own words say basically the same thing. Many complaints from writers that equal pay for stories doesn’t align with their interests. “My story is longer than yours so I deserve more money for that factor alone.”  Sure, they were a tad more polite about it, but whatever. Writers of long form work didn’t like actually being on a level playing field in an open market based on nothing but the story itself. I can’t really blame them. That’s never been the case at any point in any of our lifetimes. This brief period of Kindle Unlimited has been the only time short works have existed in absolute parity commercially with long works that I have ever seen. And writers of long works didn’t like it one bit.

To borrow a concept from the social justice crowd, I’m calling this “novelist privilege.” They’ve had advantages (largely based on nothing more than cost effectiveness for printing and distribution) for so long that they don’t even see them as advantages anymore. And whenever something comes along to actually counter those advantages, we get a bunch of complaints about how unfair it all is, quickly followed by numerous characterizations that the previously disadvantaged class is somehow stealing what’s rightfully theirs. It never crosses their mind that, all this time, they may have been the ones unfairly siphoning away resources from others. Don’t even get me started on poets, writers of children’s books, novellas or non-fiction reference works. You folks are getting shafted by this just the same, if not worse. To be fair, you non-fiction reference folks were getting boned by the old system, too.

So what happens when you point this out? Here’s a comment I left on The Passive Voice the other day in response to all this talk of “fairness”:

“Except it’s not leveling the playing field. It was level. This is slanting it back in favor of novel length work, a trait that been SOP in publishing for about 75 years now, if not longer, and largely originating in the cost effectiveness for printing certain length stories, something that should have little or no bearing on a digital subscription service. Not to mention, pay per page? That’s regressive and backward thinking, in my opinion. I would argue with your statement that a writer deserves to be paid more for a longer work. Do you pay extra for longer songs? Do you pay a premium ticket price for a longer movie?”

This illicited a couple responses, needlessly to say, none of which were in an any sort of agreement. Here’s one:

“This is comparing apples to oranges to ask about long songs or movies. For decades, writers have been paid more for longer stories. Short stories were sold in collections or in magazines which effectively reduced the royalty per story, and then with the arrival of ebooks, a short story has almost always been priced lower than a longer novel, meaning the author earned less…Before KU, writers of short stories were almost always paid less than writers of longer works. This is a return to something along those lines.”
— Nirmala, commenter on The Passive Voice

No, I’m not comparing apples to oranges. The commenter is the one comparing apples to slightly different varieties of apples and calling them oranges. A differentiation, as pointed out here on the Dear Author blog that is becoming more irrelevant by the day. Of course, that piece also included some consternation on what this “means for the book” and a couple of thinly veiled shots at short works as being gimmicks. I’m telling you, this stuff is everywhere.

Other than that, this response basically consists of little more than saying, “You should be paid less because you’ve always been paid less.” Let’s try this one on the equal pay for women advocates. I’m sure they’ll find that reasoning very compelling. Ten minutes worth of human history should be enough to invalidate any arguments based on the premise that we should simply continue doing something because that’s how it’s always been. Especially considering that what we’re discussing here is the pay scale in a digital only subscription service for written works that’s only existed for one year. Always seems to have gotten a lot shorter. Here’s a good example of the destructiveness in that kind of thinking

“Much of that ‘standard’ (publishing contract) language has been around for years thanks to institutional inertia; as long as somebody signs an unfair clause that favors the publisher, the firm has no interest in modifying it. But even contracts negotiated by agents and lawyers often include longstanding ‘gotchas’ that live on only because ‘it’s always been that way'”.
— from the Authors Guild Fair Contract Initiative preview

This may be the first time I’ve ever quoted The Authors Guild and not immediately followed it up with some concerns for the collective IQ in that group. But it just goes to show you, conditions change around us every day. Because it’s always been is no answer at all. It’s the “because I said so” of responses for folks with no actual comeback.

For a more pointed response, Hugh Howey then gave his thoughts on my point:

“Wait. So writing a novel takes the same amount of time as writing a short story? No, this system is far more fair than the old one. If it takes me 6 months to write a 100K novel, and it takes you 6 months to write 10 10K short stories, then we should get paid the same per page (or time spent reading), not per item.”

When did I say anything about the time it took to write a story of any length? But since he brought it up, I’ll bite. The Goldfinch, rather famously, took eight years to write. Is he implying that Donna Tartt deserves eight times the compensation for one read that another author who penned an identical length book in just one year deserves? And what if it took me six months to perfect just one 10,000 word short story (different form of writing, remember)? Poe himself was rather famous for pouring over every word of every story over and over and over again, to get the desired overall impact described in his own words above. That takes time. Or better yet, is this a suggestion that a novelist who finishes a book in two months should only be entitled to 1/6 of the pay per one read that a novelist who took a year to write a similar sized one? It’s a moot point anyway because, even with this new change in pay terms, the time spent writing the work is totally irrelevant to any ultimate compensation, only its length.

I already addressed the same pay per page point earlier. It presumes a false equivalency of the value of one page amongst a variety of very different story forms. All pages are simply not created equal. Howey also mentions time spent reading as a metric deserving additional pay. Set aside for a moment that one page of a short story may be “worth” 10 pages (or more) of a longer work in impact on the reader. Under the new terms, Amazon doesn’t care how that time is spent. They’re payout is the same if the reader goes through one 500 page novel or ten 50 page short stories. Their only concern, and the driving impetus behind this change, is complaints from longer form authors unhappy with their stories competing on an even keel with other story forms. The time spent reading now matters to Amazon only in its totality, not its granularity. And where are all the complaints from readers? What I’ve seen is a lot of authors complaining that readers might not like it, but little or none from actual readers with those issues. Amazon’s own words reference only the complaints of authors. Silence on any such concerns from readers.

Under the old system, a short work and a long work would trigger a payout once a reader passed precisely the same percentage of the story itself, however long that story is. But now, 1/500 of a novel generates the exact payout as 1/50 of a short story, using a 500 to 50 page comparison basis. That constitutes fairness? Not from where I’m sitting. In fact, the only point I’ve seen to defend this is simply the longer work deserves more pay because its longer. Even taking into consideration that authors only get paid for what is read, that same 50 page short would need five different full reads to reach the same compensation as one person who only read half of the 500 word novel and couldn’t even finish it. How’s that fair again, in any other consideration than sheer, context-less volume?

Let’s do a little experiment. Stephen King’s The Stand checks in at a whopping 1,472 pages (I’m using the expanded version because that’s the one I actually read). By the way, I think they call it The Stand because you can use to stand on and reach stuff on high shelves. What could I have read that equals what King would get from one read of that monster? The Maltese Falcon (196 pages), Lord of the Flies (208), The Haunting of Hill House (174), And Then There Were None (208), I Am Legend (159), Animal Farm (140), Fahrenheit 451 (179) and War of the Worlds (224) combined would trigger exactly the same total payout by Amazon of The Stand. King’s bloated apocalyptic mess would generate the exact amount that Dashiell Hammett, William Golding, Shirley Jackson, Agatha Christie, Richard Matheson, George Orwell, Ray Bradbury and H.G. Wells would have to share amongst themselves.

Let’s go a little further. Are you a Sci Fi fan? It would take six mysteriously appearing replicants of Stanislaw Lem’s Solaris to equal one Stand. You would need seven wicked somethings coming this way for Bradbury’s dark carnival tale to get equal pay to King. It would take 13 trips up the Congo for Conrad to reach the heart of pay equivalency with The Stand. The horror, indeed. If short stories are more your thing, Shirley Jackson would need 122 tickets for her masterpiece 12 page short The Lottery to pay out the same as King. Or how about Poe himself? He’d need nearly 150 Houses of Usher to collapse in on him just to equal the pay generated by one read of The Stand. How, in the name of all things good and holy, can a system like this possibly be described as fair? Are we seriously going to argue that one page taken from any of the above mentioned works is so equivalent to one page of King’s that it should be the end-all determining factor in how compensation for written work is doled out within this platform?

I’m not arguing for the relative merits of any of the above stories, nor the relative demerits of King’s. These are a variety of works I have read fully, at one time or another. Taste is totally subjective. Any reader could make a list like this based upon their own personal taste and still, I think, reach a similar conclusion. Per page pay is nonsense that directly benefits writers of longer works above all others, for no other reason than length. Even if readers don’t finish the longer works they start, it still takes multiples of full reads for writers of short works just to catch up with compensation for partial reads.

I’ve read quite a lot over the past few years from many independent writers of novels about how old school publishers simply don’t like competition to their stories on a more level playing field. Apparently, so it seems, neither do a great many of them.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Ghost in the Machine

Let’s talk about Zoe Sugg. Firstly, good for her. She’s built a huge YouTube following which has given her a great platform to work from in the future. Having said that, people like her need to be careful who they partner with. From all reports, she’s very happy with Penguin, so there’s that. (Amanda Hocking was very happy with her publisher after she signed her contract, too. Anybody heard from her in past few years?) But Zoe also had to take “a break” from the Internet and has gotten excoriated in some circles once it was revealed that the book was largely ghost written. She needs to realize none of that happens if Penguin/Random House weren’t being disingenuous with how they’ve billed and marketed the book.

I have concerns about the nature of her contract. Namely, if Penguin contracted and paid the ghostwriter, who actually owns the rights to the book? Zoe claims the story and characters are hers, but I really would like to see how her contract is worded. It may well be her story but the book itself is a work product bought and paid for by Penguin from someone else. Is it possible Zoe might never be able to get the rights reverted under any circumstances because she’s never had them to begin with?

It kind of got me thinking about something I wrote a while back speculating that a deep substantive editor who made changes to story and characters might have a copyright claim on those elements of the work. If the storyline and characters came from Zoe but a different writer fleshed out the actual work, wouldn’t that put Zoe effectively in the position of a substantive editor rather than the creator? If she, in fact, does have an inherent copyright claim on the work, how would it not follow that other substantive editors have one as well? Ultimately, it’s all in the contracts. I hope Zoe had a good lawyer.

However great she is at her YouTubing, and she’s clearly magnificent at it, she’s not a writer and doesn’t have a deep level of understanding of the nature of publishing. I expect she was told by Penguin that this is all good, it’s how it’s always done and don’t worry about it. Meanwhile, the PRH CEO is at conventions mouthing off about what a great storyteller she is and how great her book is while purposely avoiding any disclosure that she didn’t actually write it. Now 99% of the time, we expect celebrity books to be ghostwritten. But those books are generally all nonfiction. Doing this with fiction, though, is a different animal entirely. And if it is really “how it’s always done”, would PRH like to disclose how many other works of fiction they’ve published and marketed under famous brands that weren’t written by the person who’s name is in big letters on the cover? And pseudonyms don’t count. That’s still the person who wrote it, even under an assumed name. I don’t expect they will any time soon. Even James Patterson, however you feel about his book mill, openly discloses that he only writes a short outline and credits the actual author on the cover as the writer, not some vague “thank you for helping me” stuffed in the acknowledgements.

Here’s the thing; publishers have largely failed in their plan to harvest indie authors who develop large platforms and fan bases as a sort of “farm system” or “minor league.” So they’ve moved on the harvesting non-writers who have developed large platforms in other media and constructing books to fit the brands in question. It’s good business, and I’m not going to fault them for taking a swing at it. What I will fault them for is using those platforms to market fiction under the brand name when that person didn’t actually write it. It’s deceptive, in my opinion, and more than a little obvious as a cynical money grab. What I hope the Youtubers are doing is realizing that their platform is what the publishers want and that it gives them leverage. I sincerely hope they are using that leverage to get the best contract that suits them and protects their interests going forward. Because what’s not really debatable is that Penguin doesn’t care about the long-term viability of Zoe’s brand, only that they can capitalize on it right now. They aren’t going to protect Zoe or any of the others. That’s up to them to do so themselves. I really hope they both understand that and are acting accordingly.

Would it have been so difficult for Penguin to have put “Zoe Sugg with…” the ghostwriter’s name on the cover? Would it have undermined their marketing to acknowledge this was more of a collaborative effort than an independently written novel? I don’t believe it would have. Penguin clearly did or they would have disclosed it before the Internet sniffed it out and disclosed it for them. Maybe that’s a lesson here, too. Deceptive or misleading marketing doesn’t work anymore now that the entire world can fact check your ass in a couple of hours.

It’ll be interesting to see how the next YouTuber book is billed and marketed. At the end of the day, Zoe is moving product, and a lot of it. These YouTubers are independent, self-made people for the most part. I’ll be fascinated to see how that translates to long-term arrangements with publishers. My guess is it will go like the indie author thing went for them. Some successes and high profile signings early that will fade as the novelty wears off and the inherent conflicts between publisher and YouTuber business models start to manifest and the YouTubers realize there’s more money (and creative control/freedom) in it to do it themselves.

But for now, publishers may have finally found a group to whom their skill sets and added value propositions actually still attract; people with huge social media followings and zero professional writing skills.

One last point in all of this, the sentiment issued by this asshole:

“The book I am most proud NOT to have published (and most ashamed for my fellow publishers for signing up): Girl Online by Zoe Sugg…Zoella’s ghost-written confection, cobbled together from her dispiriting blog and her superficial life spent shopping and stressing about makeup. When there are so many great YA books and writers, it is horrible that such effort should be put into churning out an offshoot of a blog that is essentially about … nothing.”
Andrew Franklin Publisher, Profile Books

Get over yourself, already. And if your claim is that you wouldn’t have published this knowing the success it would find, I will call bullshit on that every day, and twice on Sundays. Today just so happens to be a Sunday, so that’s absolute bullshit. Bullshit, I tell you!

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Royalties, Oh Royalties, Wherefore Art My Royalties?

“It is our hope that Hachette, in light of the loyalty its authors have shown throughout this debacle, takes this opportunity to revisit its standard e-book royalty rate of 25 percent of the publisher’s net profits.” Roxana Robinson, president of the Authors Guild

So here we are. Hachette has a deal. Simon & Schuster has a deal. They have the pricing responsibility they wanted. Amazon has its “specific financial incentives” to compel them to use that power to price lower. Now we’ll get to see just how badly publishers want to institute a price-based windowing system for new releases (I’m setting the over/under on new release ebook prices at $16.99. And I’m taking the over.) But what did writers get out of this? I’m glad you (rhetorically) asked, because nobody else seems to be.

I’ve read all the coverage I can find and, as far as I can tell, the sum total of what writers got from this is that Hachette writers will have preorders reinstated and be back on two-day shipping. That’s about it. Oh yeah, there’s all the sales they lost during the past seven months. They’ve got that, too. There’s no Macmillan-like pool of recompense for those folks; no extra royalty payout for the damage done to their business. And they’ve got the hit yet to come from all those lost sales when their next contract rolls around. But at least, like the Robinson quote above, they’ve got hope that possibly Hachette (and others) maybe might take some time to reconsider their ebook royalty rates, if it’s not too much trouble. Because loyalty. My dog is loyal, but if I screw with his food, he bares his teeth and growls. I don’t screw with his food. Loyalty unrespected is subservience.

The blatantly obvious here is that anyone who thought writers would get anything but screwed on this was deluded. Especially after their authors interjected themselves into it in, bluntly, the stupidest possible way. They threw all their weight behind one side, not coincidentally, the side that needed them and they had leverage with, and asked nothing in return. Now we’re told they did it out of loyalty as if that’s some kind of honorable thing and not horribly misplaced naivete. Now we’re told authors are going to try to get better terms. My thoughts on that strategy were summed up nicely:

“What opportunity would that be? The one where they’ve settled up with Amazon, already have you all under contract at that standard, and don’t need to name-drop you morons in an obviously coordinated PR assault on a rival anymore? The opportunity to do a hell of a lot more than “hope they revisit the standard” was the past seven months when Amazon had Hachette over a barrel and the other publishers were all worried they were next.”

But don’t take my word for it. Let’s see what some publishing executives have to say:

“Speaking at a Society of Authors (SoA) panel on hybrid authors, Little, Brown CEO Ursula Mackenzie defended publishers from criticism by audience members that they now only take on books that will make money.

“Every book can’t make money,” she said. “There are careers we support for years…there are many books we publish lovingly where we don’t make money.”

Mackenzie said that publishers “are not taking a disproportionate part of the profit”, and that “no one benefits if publishers go out of business.” Little, Brown has a “fair rate for our e-books,” Mackenzie said.”

Good luck parsing the logic out of that one. “We publish lots of stuff that doesn’t make money, so we can’t pay you fairly for the things that do or we’d go out of business.”

That’s a helluva sales pitch. So even if I’m succesful, I’ll still be underpaid? Where do I sign up?!? This is the ultimate conclusion of the cultural enrichment argument. They’re not regular businesses, they’re a public good. So you can’t expect to be paid like a regular business. The company has to reap most of the proceeds so they can continue to underpay you to pay for all the stuff they produce that nobody wants. It’s all bullshit, of course, and pretty blatantly so. These are all huge, multi-billion-dollar publicly traded corporations. Do you think they’re shareholders are down with pissing money away in business-threatening chunks for culture’s sake? Or are they simply feeding you a line they know plays to your sensibilities to justify squeezing suppliers (you) to maximize profits?

Think about that last part for a minute. Just the idea of paying a better royalty rate caused her to pull the going out of business card. If you can’t even consider paying me a fair (or even just slightly higher) ebook royalty without it triggering fears of going under, does that make you more or less attractive to me as an author? You’re leveraged so thinly that fair recompense to writers can threaten the very existence of your company? What’s the upside for me to sign with you? A “quality” product no one buys or a product they do buy but I don’t reap fair reward for?

Now, of course, she claims to think their ebook royalty is fair, which is the problem. I don’t really believe she thinks that but enough of you do that they can continue to get away with pushing this nonsense. Here’s another:

“Questioned on author earnings, CEO Tom Weldon said that Penguin/Random House was always looking at how much authors were being compensated, but for the moment the 25% digital royalty rate would not be changed.

“Authors are, alongside readers, the foundation of our business,” he said. “We are always, always looking at our commercial arrangements with authors to make sure they’re fair and equitable. With e-book royalties, firstly and most importantly, the business model is as clear as mud. Rather than arguing about what slice of the cake we should distribute, we need to work out how big the cake should be.”

There you go, fair and equitable and the rate would not be changed. Get a load of that last sentence. We need to work out how big the cake should be? What the hell does that even mean? Is he talking about pricing? Is it a more ominous suggestion of further attempts at limiting the ebook market itself to a certain market share? Or even more ominously, is he talking not about how big the whole cake is but deciding how big the portion of the cake is that your portion comes from? The cake is a pretty big one, dude, I think portions are an appropriate topic of discussion at the moment. Look at how he phrased that, too: “Rather than arguing about what slice of the cake we should distribute…” They’re planning on keeping the whole damn cake and then deciding what tiny sliver they can afford to slice off for you. Do you need any more evidence that they see the proceeds from your book as “their cake”? Funny how they’re not waiting to work out how big the cake should be before touting the increased profits they’re reaping from this particular literary confection. But let’s not argue about it. Then they might actually have to address the issue rather than keep enjoying all that delicious extra cake they’ve got. Did you catch him wiping the crumbs from the corner of his mouth as he said “fair and equitable”?

Even the Author Guild itself admits the publishers have no will to even consider making a change in ebook royalty rate:

“Jean Craighead George’s original decision to publish an e-book edition (of Julie of the Wolves) with Open Road (which pays a 50% e-book royalty)—rather than with HarperCollins, her longtime publisher—was a principled rebuke of the major publisher’s measly 25% net e-book royalty. HarperCollins’s aggressive strategy (the publisher spent over $1.5 million to litigate a case that ended up being worth only $30,000) illustrates the importance to publishers of keeping e-book royalty rates at 25%.”

So if you already know this, please explain why you failed to do even the slightest bit of advocacy during the past year when the Big 5 in general, and Hachette specifically, were more vulnerable than they’ve been maybe in all of our lifetimes? You think it was a good idea to show unbridled loyalty to companies who, by your own admission, are being miserly with ebook royalties and intentionally underpaying your membership? Something you’ve been complaining about since, at least, 2009? That’s five years of talk with zero tangible results. Loyalty is a positive thing in some cases, but in this one, it’s high past time to bare your teeth. The question increasingly being asked, and rightly so, is does the Authors Guild have any teeth to bare? Instead of falling lockstep in line with the publishers, why didn’t you take advantage of this opportunity to make some progress? That’s what real advocacy is. What you’re doing is no different than what I do, talking. Only I’m not collecting dues or pretending I’m representing anyone’s interests.

Speaking of the blind leading the blind, here’s the Authors Guild meeting with members of Congress ahead of an upcoming review of copyright law:

“Executive Director of the Authors Guild, Mary Rasenberger’s speech was part of a panel co-hosted by the Authors Guild and aimed at giving the Congressional group a behind-the-scenes look at “a book’s passage from manuscript to marketplace.” The panel consisted of authors, editors, and publishers.

In her speech, Rasenberger focused on the “urgent state” of authorship today. “Even authors who made a living writing books for decades now need to find alternative sources of income,” she told the assembly. “This means they write less—and, in some cases, not at all. Fewer professional authors means fewer types of books that might take years of research and writing. These are precisely the kinds of books that further the knowledge and learning that copyright is meant to foster.”

Do you think her presentation of “manuscript to marketplace” included even a word about indies who skip the publisher involvement altogether? I don’t either. I’m certain it was a glowing testament to how essential publishers are, with writers and editors simply add-ons to the process, shepherded by their greatness. Maybe the urgent state of authorship wouldn’t be so urgent if authors had effective advocates. Maybe there wouldn’t be so many authors needing outside income streams if you did something about low royalties other than hope and talk. Don’t miss the loaded use of the term “professional” in there either. Who does this woman represent? They’ve done nothing about the royalty rate, they are dismissive of indies in presentation and implication if not in direct language. And they just came to heel when the publishers blew their dog whistles over the past few months, a time when they actually had some leverage to get something done. Amazon was practically begging them to do something. Is it any wonder publishers think they have you all locked down?

The question I’m asking is can authors get some real representation at these things? The only seat at the table we get is through groups like the Authors Guild, and sometimes that’s even less useful than having no seat at all. So what were they talking about at this congressional get together other than how crucial publishers are? Here’s the release from the committee:

“Great books, both fiction and non, have an incredible ability to capture our hearts and minds, taking us to another place or time with words on a page. Yet many of us do not think about the hard work and collaboration that goes on between authors, publishers, and many others to help take a book from manuscript to marketplace,” said Reps. Judy Chu and Howard Coble, co-chairs of the Creative Rights Council. “Together, this collaboration is at the heart of a $27.2 billion industry, but challenges like digital first sale, unreasonable expansion of fair use, and online piracy are threatening the livelihoods of the hard working men and women who bring these works to life. We are proud to have hosted this important panel in order to influence the conversation on copyright law as we continue moving forward.”

Notice authors is mentioned only once, in the context of the collaboration. Is it authors’ livelihoods they feel are threatened, because, as everyone should have already been expressly aware, the vast majority of traditional authors don’t have livelihoods from their work to be threatened. And that is in no way a recent development, rather a consequence of the industry’s very structure. So get ready for copyright law as publisher bailout (none of the benefits of which will even trickle down to the writers), coming soon to a congressional hearing near you.

It’s telling that both first sale and fair use were specifically cited as “threats”. Is this how the Authors Guild presented them? What exactly does Rasenberger mean by what “copyright is meant to foster”? First sale and fair use are both consumer rights granted by copyright (yes, consumers have rights under copyright law, too. Although maybe not for much longer if these folks are any indication.) How about we discuss life+70 that flies directly in the face of what copyright intended as a limited time of exclusivity for creators. It exists not for the benefit of creators, but of transferees (not mentioned there, by the way) so they can continue to profit from creators’ works for generations after their death. Or how about the fact that this standard has basically caused the public domain of recent material to wither and die (another element copyright law intended to be vibrant and available for both creators and the public).

But, alas, no. The “threats” here are like they are every time copyright comes up; the rights of consumers are given short shrift, if acknowledged at all, and the rights of creators are subverted, in direct opposition of what was intended, to protect corporate licensees’ profits. If you want to have a frank and open discussion of copyright law, let’s do it. But can we get someone other than the Authors Guild at the table please? I have no faith they’re even on the right side of these issues for authors and won’t simply fall lockstep in with publishers when push comes to shove (again). I’m sure they’ll talk a good game but when it comes time to pick a side to support, they’ll be right there with the publishers, no matter how much more ground creators and the public have to give up so Disney can continue milking Mickey Mouse in perpetuity.

Maybe I’m wrong. Maybe I’m being too harsh. Maybe the Authors Guild, once it sinks in that their loyalty has gotten them squat, will finally break out the snarl and get down to the real business of business and stop validating the publishers’ “enriching themselves while underpaying writers is essential to culture” argument. And maybe pigs will fly.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Protect Yourself: Some suggestions for writers in the age of Agency reborn

Now that the 100-Years-War between Amazon and Hachette has drawn to a close, writers can do what they should have been doing the entire time (and what many of us indies have been saying, repeatedly, over and over and over again the whole time): stop worrying about a publisher’s deal with a retailer and start worrying about your own deal with the publisher. And to kick off, here is an example of a way not to do that:

“Speaking on behalf of the Authors Guild, president Roxana Robinson called the end of the standoff ‘great news for Hachette authors.’ Robinson said it was ‘heartening to see so many writers rally to the defense of their colleagues’…Robinson said that while terms are said to be favorable to authors, the Guild has no way of knowing at the present time if that is the case.“

Bold emphasis added by me. Yup, great news! We don’t actually know that it’s great news or that the “heartening defense of colleagues” wasn’t actually a publisher-coordinated stroll down the garden path, but, hey, the war’s over and it looks like we won! The problem is that winning the war (if, in fact, that’s what happened. She just said they don’t know) isn’t the end, it’s winning the peace that matters now. Then there’s this:

“Robinson added that she hopes the ‘display of communal spirit played a part in bringing the negotiations to an end’ and ‘will prevent authors from being dragged into corporate disputes in the future.'”

Communal spirit?!? This is a high level, billion dollar corporate negotiation. Bezos and Pietsch didn’t burn one and sing Kumbaya to settle this. This is a serious business, sunshine, and you’re the President of a guild of professionals not a neighborhood bake sale. And this:

“‘It is our hope that Hachette, in light of the loyalty its authors have shown throughout this debacle, takes this opportunity to revisit its standard e-book royalty rate of 25 percent of the publisher’s net profits.”

Sweet Jesus! Tell me you’re not that naive. Loyalty?! What part of “billion dollar corporate negotiation” don’t you understand? You hope, in light of your “loyalty”, that they take this opportunity to revisit that standard? What opportunity would that be? The one where they’ve settled up with Amazon, already have you all under contract at that standard, and don’t need to name-drop you morons in an obviously coordinated PR assault on a rival anymore? The opportunity to do a hell of a lot more than “hope they revisit the standard” was the past seven months when Amazon had Hachette over a barrel and the other publishers were all worried they were next. The only opportunity you have now is for them to laugh in your face. Again. Just like they’ve been doing ever since you first started saying “we hope (insert publisher here) will rethink the 25% of net standard” back in fucking 2009! Hope is nice and all. Effective action is a little more useful. And you just pissed away a great opportunity to get something real done for authors in exchange for loyalty and hope. Good job, good effort. In other author news:

“Douglas Preston, who founded Authors United, said he was ‘relieved’ to hear about the agreement…he hopes that in future disputes between Amazon and publishers, ‘Amazon will never again seek to gain leverage by sanctioning books and hurting authors.'”

Of course he’s relieved. But guess what, Doug? Now you can’t blame Amazon for not discounting your books anymore. That’ll be your publisher doing that. And you’ll possibly be getting paid even less per high price book now than than you were before. Congrats on the big win! This guy’s a joke. Hachette’s only business with Amazon is selling books through them. The only leverage Amazon has is those books. Not only will they do it again, anyone in their position would as well, including the company he just spent six months shilling for while pretending to be a man of the people.

So, given the fact that the leadership caste of authors is woefully lacking, (my Dad would say “useless as tits on a bull”) here’s a couple things I’ve noticed about the state of things and a couple helpful suggestions.

1. 25% net ebook standard isn’t going anywhere

Despite Robinson’s hopes and dreams, I see no reason to believe this is even on the table. In fact, I’m suspicious this supposed price control of ebooks publishers are getting now won’t be used in ways that minimize author compensation and/or manipulate reversion clauses to retain rights they’d otherwise lose. I’d be willing to bet that if, by some chance, we see publishers willing to go up en mass, it’ll be because they’ve already gotten back twice as much by manipulating the revenue underlying the percentage. They have no reason to change in this respect and all the authors who showed their blind loyalty only reinforced their position. Here’s Penguin/Random House CEO Tom Weldon on the matter:

“Questioned on author earnings…Weldon said that PRH was always looking at how much authors were being compensated, but for the moment the 25% digital royalty rate would not be changed.”

And in this tweet from Porter Anderson about Weldon from Futurebook 14:

“Tom Weldon says that on the whole, the average royalty is 17-18%, so 25% on ebooks carries some logic.”

Nope, not gonna happen. But I’m sure your loyalty will be rewarded in other ways, like consideration in your next contract…

“Simon Lipskar, president of the literary agency Writers House, whose clients include a number of Hachette authors, welcomed news of the agreement. ‘Our writers have been suffering terribly because their sales have been significantly diminished as a result of this dispute,’ Mr. Lipskar said. He said it was possible that there would be long-term consequences for some authors because of diminished sales when it comes to negotiating new contracts.”

Oops, nevermind. Have a look at The Bookseller’s Digital Census:

“More than half (51.2%) think (ebook royalty) rates should be the same as for print books, but just over a third (36.6%) think they should be higher, and the rest (12.2%) lower.”

As our friend Mr. Weldon helpfully pointed out above, print rates are already lower than ebook rates. That means that 63.4% of publishers who responded to this census think 25% of net on ebooks is too high. The other 36% said higher than print, which they already are. It doesn’t say 36% think they should be higher than the current standard. In short, you’re not getting any movement on this without some major leverage. The kind of leverage AG and AU just gave away for loyalty and hope. Aww, isn’t that just precious? Too bad this isn’t a Nicholas Sparks novel. Come to think of it, you’ll be lucky if they don’t cut these rates. If somebody gave me 2 to 1 odds, I’d lay a c-note right now on that being exactly what will happen.

2. Authors could get really screwed on these new agency type deals

Here’s Michael Pietsch, Hachette CEO, explaining why I think this will be the case:

“Importantly, the percent of revenue on which Hachette authors’ ebook royalties are based will not decrease under this agreement.”

No, that percentage will decrease in the new standard terms in their contract language resulting from this agreement and in the contract riders you all are about to get between now and when this agreement takes effect in a couple months or so. All I know is that when a large corporation is assuring you about percentages, it’s total dollars you need to be looking at. When you read a missive from a large corporation, it’s not what they say that matters. It’s what they don’t say and how they go about not saying it. All he’s saying here is that the percentages they’re calculating your royalties on won’t change under this agreement. He’s not saying they won’t change under your agreement with them or saying your revenue itself won’t decline. There’s a second more subtle issue here too. He’s conflating their deal with Amazon to their deal with you. I’d say on purpose. One of my main complaints with the author response to this dispute was that many of them showed a lack of understanding about who was actually responsible for what to whom under these contracts. Odds are, the publisher likes it when you don’t know and will try to keep it that way.

So what does Amazon have to say about this?

“We are pleased with this new agreement as it includes specific financial incentives for Hachette to deliver lower prices, which we believe will be a great win for readers and authors alike,” said David Naggar, Vice President, Kindle.”

Specific financial incentives for lower prices? The prevailing wisdom is that means a tiered, KDP-like system with a lower cut at higher prices. But then Pietsch’s statement to their authors would seem to contradict that, but for two things. Without seeing an actual Hachette contract, we don’t how he’s defining what that “percent of revenue” as. And, as I mentioned above, the phrase “under this agreement” is problematic. There’s also another option; perhaps instead of creating a tiered system with lower rates at higher prices, this is the opposite; higher rates at lower prices. That would satisfy both Amazon’s claim of “specific financial incentives” and Hachette’s claim that revenue the author’s cut is based on isn’t decreased. Or it could be something else altogether.

My concern is the capacity Hachette (and presumably S&S) now possess over retail pricing. Publishers have shown before they’re willing to leave specific financial incentives on the table (the Apple collusion was a worse deal for them than they already had). They seem hellbent to protect the print market at all costs. Whatever those financial incentives are, they’ll leave them sitting on that table, at the very least as a windowing action for a hardcover release, to suit those ends. As an aside, you may want to check on print discount clauses in your contract and see how many of those constitute your hardcover sales. Jacking up your ebook prices to restrain sales of a format that pays you more to encourage discounted hardcover sales that pays them more (and, not coincidentally, you less) is a decided possibility here. Look out for it.

There’s an underlying assumption that if, in a vacuum, print and ebooks were allowed to compete unrestrained by and irrespective of the other, that ebooks would take sales away from print. But remember, it’s an assumption. One that hasn’t really been born out by any hard evidence, at that. But it’s the basic assumption being used to justify current thinking in ebook pricing by most publishers. The ebook must be priced high enough that it doesn’t cannibalize hardcover print sales. The higher yield on an ebook sale doesn’t matter in this context. To you, though, it sure as hell better matter. We don’t even know for sure that, if allowed to compete organically, ebooks would even cause the damage to print they claim. They’re really two separate entities; different presentations, different cost structures, different primary sales channels, even a different audience to a significant degree.

Now I do think print sales are going to decline, probably dramatically, but it won’t be ebooks causing it. It’ll be the loss of brick and mortar shelf space from the influence of online commerce, and related elements. By using price to emphasize one format’s sales over the other, they’re inherently handicapping sales of the format that, even at miserly trad rates, pays you better relative to cost to the reader. You often hear how authors make more on a hardcover than an ebook (something true largely because they’re under-paying you on the ebook) but consider, with the hardcover sale, your readers have to basically drop another $10 so you can earn an extra $1 in royalties compared with the ebook. That’s not good for anyone but the publisher and, maybe, the book stores. And it’s clearly their preferred option, one they now, reportedly, have even more power to put into action.

So what can you do to protect yourself and make certain you don’t fall into this trap of what I’m certain will be declining revenues? Well, I have a few suggestions.

Stop selling ebook and print rights as a bundle

I’ve suggested in the past that writers who’d like to prevent their publisher from handicapping one format to benefit another have a simple means of doing so; don’t sell both print and ebook rights as a bundle to the same entity. They can only coordinate if they have full rights to both. Don’t give it to them. Another option would be try to separate the contracts; go for totally separate deals for print and ebook rights. And when I say separate, I mean it; separate contracts, separate advances, separate royalty structures, reversion clauses for each independent of one another (with no pesky non compete provisions than would stop you from using reverted rights elsewhere for one if the other didn’t revert). In this way, the publisher couldn’t link the two formats, they’d have to fully exploit both formats, not limit one to prop up the other without risking losing the one they’re limiting.

Publishers will tell you they need all these rights so they can spread costs across all formats and maximize revenue with dynamic pricing. Linking two sets of rights with such divergent cost structures will inevitably lead to one getting the short end to favor the other. If publishers won’t go 100% on both, you lose. Don’t give them the option to do so. Make it clear if they want both print and ebook rights, they have to exploit both to the fullest, not prioritize one over the other. Publishers will say that supporting bookstores is crucial to them and justifies hamstringing digital. For them, maybe. For you, not so much, especially in the long term. Separate accounting and reversion clauses is one way to create a barrier that prevents them from prioritizing one over the other. A better way is don’t sell them both to the same publisher.

Will publishers do this? On the whole, hell no! So the shorter answer here is probably “self publish”.

Refuse to accept any 25% of net contracts

In the immortal words of Nancy Reagan, just say no. The 25% of net standard is far too low. If they won’t budge on it, take ebook rights off the table. If that’s a deal breaker for them, so be it. Grow a pair and walk away. Taking a bad deal is not better than no deal at all. You will regret the bad deal later. The Authors Guild can talk all it wants about loyalty but that’s not going to get any movement on this. Only actual pressure will. The Guild obviously doesn’t have the will to bring that pressure to bear. As for Doug Preston, who makes his money on big advances and willingly admits he’s not one who watches his sales, he had a lot to say about how crucial advances are in his various AU missives but jack shit to say about royalties. There’s no help coming from there and his band of jolly, powerful, influential writers, either. If 25% of net is going to go up, the only way it’s happening is if writers individually simply hold the line and refuse to sign over their rights for that price.

Will publishers be amenable? Almost certainly not but there are some who might. So, again, self publish is probably the shorter answer here, too.

Refuse to sign any life of copyright contracts

If you must sign on with a publisher, having a hard deadline they must produce in is probably a good idea. I like the notion of a five year contract. You can work in provisions for renegotiation or what have you, but if publishers want to keep control of the rights, make them actually have to pay for that privilege. As it stands now, publishers are basically paying you nothing for lifetime control of your IP. There’s not one tangible thing in these contracts that would change if they had a 5 year limit rather than forever plus 70. You’re throwing in lifetime control for essentially free. Stop it!

These kinds of contracts do exist and are becoming more common with smaller publishers. The big guys though, they treat your IP like the girl who doesn’t want you but doesn’t want anyone else to have you either. Once they get your signature, they’ve locked your IP in a box where anyone making money from it will have to go through them for the rest of your life. They’ll squat on your rights before they risk giving up on them and you finding success elsewhere. But you have to be willing to walk away, which again likely means self publish.

Watch those fuckers like a hawk

If the first three suggestions here don’t play out, which is entirely possible, there’s always a compromise. The great American philosopher Meatloaf said it best, two out of three ain’t bad. You’re likely not going to get everything you want, but you can get something better than what we have today, something you can live with. Life is all about compromise. Just don’t compromise yourself in the process.

But if you do end up signing on the dotted line, you must watch what they do with a fine tuned eye. Start tracking your books on every platform you can think of, compile data on how they’re being priced, when and where. Compare any sales data (and monies) you get from them with your own data. Get an idea of exactly where your sales are happening and how that relates to how they’re being priced. More than that, scour your contract and make certain you understand exactly what each format actually pays you (and them) and work that into your data. Basically, pay close attention.

Now what to do if you actually find something screwy, like sales being pushed to formats that pay them better and you less? I’m not sure what recourse you have, especially if you’re on a life of copyright deal. Probably none. But just showing them you’re aware of what’s going on can have a positive impact. A car mechanic has a more difficult time padding their bill when a customer comes in showing knowledge about what the problem is and what the costs to fix it should be. Publishers aren’t stupid, they adhere to the adage “You can screw all the people some of the time, or some of the people all the time, but you can’t screw all the people all the time.” The more you present yourself as educated and aware, the better your chances of avoiding the pitfalls that get those who toil in willful ignorance.

Does this sound like a lot of work just to keep a company you should trust to do right by you on the clear path? Yes it does. Will publishers appreciate you being a pain and questioning their actions? Most definitely not. But honestly, you should be doing this stuff already. The only person who’s always going to watch out for you and your interests is you. Don’t ever forget that.

Of course, you could be devoting all that time you’re spending to double check them by self publishing, but what do I know? I prefer not to get ripped off in my contractual dealings. Maybe you don’t mind about that. Do you? Prove it.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

The Case For Why Writers Need Publishers

Um…
Well, maybe…
I suppose they could…
They might…
Huh.

The End.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

A Trip to the Library’s Used Book Sale

My haul from the library used book sale this morning.

This weekend is the Fall used book sale at my local library here in scenic Chestertown, Maryland. They have these sales twice a year, Spring and Fall. They set up a large room with hardcovers and trade paperback books piled high on a series of tables, lined up on shelves surrounding the room with more piled three rows deep underneath the tables. The hallway outside the room has another set of tables packed two layers deep with mass market paperbacks, and also has the piles of books underneath each. It takes a couple of hours to properly browse the available material. And you can’t beat the prices!

Some writers and publishers have a love/hate relationship with used books (mostly hate). I’m not one of them. It’s love all the way. If not for the availability of used books, I wouldn’t have read half of what I have in my life and the number of different authors I’ve become fans of would be demonstrably smaller. Some may not like it but when you consider none of those books are there for sale without someone having bought it full price first (or discounted as the publisher wants), all I can say is get over it! You want to know where discoverability happens? It’s right here in this room full of books so cheap as to nearly be free. It’s also why discoverability with digital is more problematic and why free is uncomfortably (for them) popular among readers; no used market to speak of.

I spent my hour this morning browsing and finally headed out with a bag of nine books that, in total, set me back roughly three times the price of the cup of coffee I bought at Royal Farms on my way home. The notion that cheap nigh-on free books is some new development from the Internet is absurd. This kind of sale has been going on for longer than all of us have been alive. It just wasn’t trackable in the ways digital is. And it’s always been a beneficial component of the industry, not a detriment. “Cheap books are good for business” is not an idea Jeff Bezos invented, despite what some would have you believe.

There are a few things I took away from this morning’s jaunt, more than just the new bag full of books I needed like a hole in the head. With a little mortar, I’m pretty sure I could build a summer home out of my to-be-read pile alone.

1. Traditional publishing produces a lot of crap

You hear this a lot about indies but, man, glancing through stacks of the stuff that’s been “properly vetted” by the great tastemakers only makes me snort louder every time I hear someone say how indispensable they are to quality literature. I don’t have any particular moral judgment on this, just try not to be the pot telling the kettle it’s too black, please.

2. Lit Fic doesn’t have much of a secondary life past first sale

I’ve been going to this sale for four years now and one of the interesting things I’ve noticed is that you see the same types of books over and over again, year after year. Something with a windswept field and a sunset on the cover, inevitably with the phrase “From the NY Times Best-selling Author” scrawled across the top, titled “Yesterday’s Tomorrows” or some such inexplicable thing. The cover blurb sounds like a story my uncle would try to tell about his troubled life, after Thanksgiving dinner and one too many shots of Southern Comfort, before I get so bored I have to fake an excuse to leave the room. These books never move. They were there four years ago and I don’t doubt they’ll still be there four years from now. Even for a buck, they can’t get them to walk out the door.

3. Nobody keeps the books from the long-time mega-bestsellers

The place is filthy with them! Nearly every table is overflowing with Pattersons and Turows and Kings and Crichtons and Clancys. And not just one of each, dozens of copies of the same books, mostly all pricey hardcovers. It makes me wonder if those books were actually bought by the readers who donated them or were given as gifts. The churn rate on high dollar hardcovers evident there just seems out of place. Who drops $25 on a book then dumps it on the library? These authors may be selling large numbers of these books but nobody’s keeping them. They’re disposal entertainment. And a damned expensive version of it at that. Again, even at $2 per hardcover, these books never move.

4. Newer, short series bestsellers are an exception

There was a half a dozen copies of the 50 Shades trilogy books combined there. There was one copy of the first Hunger Games book and that’s it. There were four copies of the Twilight series books in total. There were a grand total of zero copies of any of the Harry Potter books. No George R.R. Martin, either. People are keeping those books in ways they aren’t with either literary or mass market best sellers. I’m not sure what that means, but if I had to guess, it may speak to the completionist mentality of many readers relating to a concise several-book series that doesn’t stretch on forever into 16 or 17 volumes.

5. Romance is another exception

Nora Roberts was another mega seller whose books overran the place. The difference, though, is that they move. Nobody’s buying the Pattersons but most of Roberts’ books will be gone by Sunday. I’ve watched it happen in the past where an entire table of Roberts and Danielle Steele books that are there on the opening day are picked down to bare bones by closing. The Turows and his ilk, though, end up clustered all together, with the previously mentioned best selling lit-fic, as nearly everything else around them is picked clean. Romance seems to have the same level of churn going on but they also seem to have a vibrant life after the first sale that the mega-sellers don’t.

Now, let’s discuss price. I walked out of there with six mass market paperbacks, one trade paperback, one hardcover and one paperback that was a half-inch taller than a regular paperback. I added up the cover prices of all nine books. It was $94. I paid $5.25. That’s roughly a 95% discount. Not bad. The question, though, is would I have bought any of these books at full price? The list price on all the paperbacks was $7.99. The weird taller paperback was $9.99. The hardcover was $24.95. The only one that seemed reasonably priced to me was the trade paperback of Robert Anton Wilson’s Schrodinger’s Cat Trilogy containing all three books. It was just $10.95.

The answer is that, no, I likely wouldn’t have paid those prices except for that one book. The hardcover of Joe Hill short stories looks cool and I’m excited to read it. I wouldn’t pay $25 for it. I don’t like Dean Koontz to speak of but I’ve always been morbidly curious about his Frankenstein series. There’s zero chance I’d pay the $24 list price for the three volumes but for 75 cents? Hell, I’m in on that. The Matheson and Straub books I may have gone up a few dollars on cover price and bought nicer trade editions but I wouldn’t have dropped $8 a pop on these versions, either. Ender’s Game was a lark that I couldn’t pass up for a quarter. I just saw the movie and, while it was no great shakes, it did make me curious about the book.

Which brings me to the last book I picked up this morning. Yes, I bought a Doug Preston book. I’ve never read anything he’s written (outside of his Authors United blustering. I really hope his fiction stylings are way better than that), so I’m curious. The description sounded interesting, so I thought, “What the hell? I’ll give it a go.” There was another one of his books there that sounded interesting, too. But it was a hardcover and hardcovers were $2 and I just didn’t want to pay that. (I can hear the screams of “entitled” now.) The reality is that I have no idea if I’m going to like his work. For a quarter, it’s a no-risk proposition. For $2, it’s a slightly less than no-risk. But $2 bought me that aforementioned cup of coffee. And, yes, I’m saying that fleeting cup of coffee was more important to me this morning than trying one of his books. That’s life. Get used to it.

If I read that book and enjoy it, the dynamic changes. I don’t question dropping the $2. Hell, I might even buy one (or more) new, depending on how much I like this one. But none of that happens if I don’t have access to this book for a negligible sum. At the last book sale in the Spring, I loaded up, getting about 25 books of all different stripes. Since then, there have been six new book purchases by me as a direct result of those buys. That’s six sales that would not have existed otherwise. Preston’s odds of getting me to buy one of his books new is virtually non-existant without the super-cheap used variety available to experiment and check out the lay of the land, as it were. His odds of me turning into a fan may be slim in any case, but they’re non-existant if my only choices are list price or small discount.

Even if his ebook version was $5.99, I’m not buying that. I wouldn’t pay $2 for one of his hardcovers. If the book I bought today was priced at $6, it would still be on the table where I found it. If those are my only options (or my cheapest options) he has precisely zero chance of turning me into a full paying customer. Here’s my concern with ebooks: no used versions at miniscule prices means it’s either the library or some random chance someone gives me one. Publishers have gouged libraries with exorbitant ebook prices and overly restrictive licenses. That option isn’t as viable as print either. You want discovery for ebooks to be better? Stop handicapping it. Libraries, used books for slightly above free and sharing between readers is where most discovery happens. You may think it’s bookstores but odds are most shoppers are “discovering” something there they already knew about. Discovery in that sense is more surprised to discover something you actually want is there in stock.

You can’t have things both ways. You don’t get the benefit of people putting in the legwork to discover your work and expect them to pay you for that discovery. Like most worthwhile pursuits, the back end is where the money is. I get this one for a quarter today, he may well get 5 or 6 sales over the next few years at store prices. Get rid of this one, and he gets nothing.

Cheap bordering on free books that have no direct revenue link to publishers or writers are an essential component to discovery. If we just keep progressing with ebooks as we have (and they continue to replace mmpb’s) with no used versions, limited library checkouts and prices higher or comparable to a mmpb, that discovery problem is only going to get worse. And it’s going to start to carry over into print, too, from fewer used paperbacks available like what I bought today. Subscription services can possibly mitigate some of that, but only if the catalogs are basically unlimited and the service itself isn’t too expensive or restrictive. But then, we might also be running a real risk of replacing sales with subscriptions rather than supplementing and supporting them as used books and library borrows do now. If we keep pretending books have some innate value while ignoring how, where and why the people buying them were first turned onto your work, and where they developed their notion of its value, trouble will continue to ensue.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

The Two Memes of Destruction

So I’ve reached a point of not being terribly concerned about the people who are still siding with Hachette. Especially after Simon & Schuster has done what’s been touted as the impossible, quickly and painlessly reaching a deal with Amazon. It’s reportedly an Agency-type deal too, and, in my opinion, that makes what Hachette supporters have been saying look even more suspect. I know, I know, we don’t have specifics on the deal. It could be a bad one, S&S could have panicked. Or Amazon could’ve given away the farm to them (the smallest of the Big 5) to put more pressure on Hachette knowing S&S can’t share details without running afoul of Uncle Sam. That’s all possible. But I return to a theory I pointed out a while back. This fight isn’t because Amazon is trying to destroy the world one publisher at a time, Hachette may just have badly overplayed their hand by picking a poor strategy. A strategy, by the way, that needed it’s writers to lose their asses for going on six months now to be effective. Sweethearts, those folks. I’d like to think that what we’re seeing here is evidence that the Big 5 might be diverging a bit. S&S cut this deal quickly and quietly. The same S&S that had a knock down, drag out with Barnes & Noble not long ago. Harper Collins is firing up it’s own sales channel and offering *gasp* to pay writers higher royalties for sales through it. (How much higher and whether it’s sufficient is another discussion entirely.) There’s continued rumbles around various parts of Random House suggesting there’s serious discussions going on about whether to ditch DRM in some way. All these are good signs. The DOJ’s actions may have had the unintended side effect of disrupting the regular cartel-like coordination of these companies far deeper than simply in their dealings with Amazon. We may be entering a period where the Big 5 function as five totally separate entities, and that alone would make what the DOJ did worthwhile, not to mention the tens of millions readers got back after being ripped off by the illegal collusion. That was pretty cool, too. It may truly be a brand new world. Or so I hope, anyway.

But if you’d like to continue to support them, have at it. It’s your funeral. Something Patterson said recently about this being like a religious war rings true. I’m not sure why he thought it was appropriate or anything short of insulting to portray traditional supporters as terrorists. Hey, I disagree with you all quite a bit and I’m not even going there. And he’s on your side! I think many of you are misguided, confused, uninformed, stuck in a past that’s always been more myth than reality, yada, yada, yada…but I don’t think you’re jihadists. No word yet on whether Hachette is promising it’s writers 72 virgin customers for writing an Amazon hit piece, you know, suicide bombing their own credibility. It’s just ridiculous. And now we’ve got a once and future king-maker agent (so he hopes) comparing Amazon’s distribution system to ISIS. That one’s too inexplicable to even criticize. Seriously, could someone give me any clue to what the hell that means? It’s like he just picked the most negative term in the news that day. “The Big 5 offer ebola like contracts!” Two can play at that game.

But one aspect of the religious war narrative does make sense. Those folks are either true believers where facts or logic don’t apply or they’re the leaders pulling the strings of the true believers to serve their own agendas. I’ve seen it said that indies are behaving like zealots but that perceived zeal comes from, you know, actually having options now in an industry where we largely had none. The irrational arguing is mostly from the traditional side. We might be loud and angry but we also tend to have arguments that don’t Involve simply shouting at people who disagree with us “you just don’t know how publishing works” without actually explaining what they mean by that or refuting the point made that led to it. Probably because they themselves don’t really know (or want to publicly admit) how publishing really works, preferring the myth to the reality. That does seem to be an increasingly common response-type. The converse of that is the people who argue with reasons in support for their positions. I won’t always agree but I’ll always respect someone who put some thought behind what they believe, not just trot out more myths, half-truths and nonsense like Paul Krugman.

Implying that Amazon is some kind of a right wing propaganda arm because Paul Ryan’s book was available but a negative biography of the Koch brothers was restricted? Did it occur to you that Amazon wants to sell books, even during the dispute? That you and I might think he’s a clueless asshole, but Ryan’s book has a virulent tea party audience that will actually pay good money to read his nonsense? And that a Koch brothers biography may be a fantastic book and important subject matter but if the only people likely to buy it are the 12 remaining Michael Moore fans and a small subset of the folks who drive a prius and want to have the book on their coffee table so they can look socially conscious to dinner guests, why would they give it extra attention that other Hachette books aren’t getting during the dispute? Besides, haven’t you heard? Amazon tells the DOJ of a Democrat president what to do and Bezos hangs with Obama. Don’t you recall the hell the President caught for touring an Amazon warehouse and daring to say nice things about them fairly recently? But then, Krugman writes for the New York Times. Maybe he simply had to fulfill his quota of negative articles about Amazon for the quarter, and if he could toss in a little of that liberal/tea party brouhaha, all the better for click bait.

What you often see is people describing publishing as a system so incredibly complex that outsiders can’t possibly understand how it works. More than that, it’s complexity requires special exemptions from even the most basic market forces. In this world, Amazon is a monopolist, indies are simultaneously pawns used to destroy publishers and junk merchants that are devaluing books and destroying literature, and publishers are the ones defending the world from the evils of competition, innovation and progress one overpriced ebook at a time. The problem with this is that the system isn’t really all that complicated, nor difficult to understand. If you dig a little deeper, you’ll find most of that complexity is an invention of the publishers themselves, or some elaborate combination of the arrangements they’ve made with distributors and retailers. Tried and true. Make a simple situation appear impossibly complicated and reinforce your position in the chain because writers and uninitiated outsiders believe they can’t possibly navigate these choppy waters or understand why things are done this way without publishers to handle that for them. That the publishers are the ones creating the chop is often overlooked. In any event, it’s bullshit. Write a book, publish a book, sell a book. It’s not complicated in the slightest. It’s not easy, mind you, but it’s not quantum physics or nuerosurgery, either. In that sense, they’re a bit like credit card service agreements, so much complicated fine print that what really is a simple circumstance becomes shrouded in confusion, which is then used to great effect to obscure the unsavory things going on in the margins.

With that in mind, here are the basic fallacies of the Seven Deadly Sins of anti-Amazon bullshit:

1. No one is “buying” ebooks. They’re licensed, not sold. You probably should understand the difference.

2. Hachette does not have a “right” to force a retailer to price like it wants against that retailers’ will. They have to successfully negotiate for that. Just ask S&S.

3. Amazon does not have a monopoly (or monopsony) on books, ebooks or anything else. They’re big with a lot of influence, no doubt. But a monopoly, they’re not. And no one has been able to point to any kind of statute that says they are.

4. Authors are not being targeted by Amazon, Hachette is. And those authors made themselves part of Hachette when they signed their contracts. Those things are usually binding folks, and they have consequences. That’s why you should read them first.

5. The only people guilty of antitrust violations are the publishers, not Amazon. Just ask the DOJ. But if Doug Preston says so then, hey, what do a bunch of antitrust prosecutors know anyway?

6. Not giving perks to a company you don’t have a contract with is not censorship, boycotting, sanctioning, disappearing or anything else other than hard-nosed business. And it’s not even that hard-nosed. Real hard-nosed business would have them booted out of Amazon’s store entirely. Plus, here’s a point of basic business relationships that no one has mentioned, giving perks to a company you don’t have a contract with just might piss off the ones you do.

7. Publishing is a cut throat industry that runs on hard market principles not fairytales perpetuated by a privileged class paid well enough to look the other way while their author brethren are ground under its wheels.

I understand why the agents, the publishers and the big money writers are fighting this. Their arguments are faulty but their motivations are obvious. They’re trying to stop the gravy train from pulling out of the station. Of course, they could just turn around and see the new high speed rail line that’s bringing in better, more efficient gravy trains every hour on the hour. No one in the industry is in a better position to take advantage of that than they are. But like Plato said, it’s easier to keep watching the shadows on the wall than to turn around and step into the light.

What I don’t understand are the writers who aren’t amongst those groups, the ones still on the outside looking to get in or the ones on the inside who can’t get out of the muddy, horse-shit coated courtyard and into to castle. Why are they supporting a system that’s feeding off of them as the foundation for everyone else getting paid? I’m thinking there’s a confluence of two memes that have always been destructive but is becoming more apparent just how catastrophic they can be.

One is “I Just Want To Write” which endorses pushing the business side of your career away, delegating it to “professionals” so you can focus on writing and cashing the checks. The other is the “Crucible Of Rejection”, the odd fetishization of struggling through years of being told no to get inside those gates. For some on the outside, it’s always the next query that’ll be the one that works. All they have to do is tweak their book a little and they’re in. Any day! Can’t walk away now! The myth tells us that adapting to this rejection forges us into better writers. The truth is it forges us into writers better suited to their commercial purposes. There’s a huge difference. For the more fortunate, they’ve gotten in, but the business specifics are totally in the hands of their publisher and their agent. They don’t know what’s really going on, and it’s not so easy to burn that bridge after celebrating your persistence and years of work to get there, even if there bears little resemblance to what you thought it was. It’s hard to walk away after you’ve put in that kind of effort. Even harder when you’re not getting accurate information and what you are getting is coming from people who have agendas of their own they’re trying to fulfill irrespective of their contractually obligated responsibilities to you. How many publishing contracts come and go quickly and quietly without the author even knowing what was done for the book, what happened and why?

All I can say to those folks, speaking from my own experiences with publishers, if you think you’re starting to smell some duplicity, look to the people in your own backyard before you start sniffing out the guy across town. It’s far more likely to be coming from nearby. The stench is coming from inside the house!

I suspect these memes, and their blinder-producing results, are why you see the argument made so often that books aren’t like other products, or books aren’t widgets or what have you. You don’t have to defend what you’re advocating as feasible in the market or financially viable if you throw the baseline of actual business sense out with the bath water at the earliest possible convenience. Perhaps the most ridiculous argument I’ve seen springboard lately is the idea that publishing isn’t profitable or profitable enough that anyone outside these current set of publishers would be interested in it. Part of that argument is an implication that these pubs are being altruistic by staying in it themselves. It’s total nonsense. My entire working experience across two decades conflicts that point. You also generally see that argument being made by someone who’s collecting a huge check courtesy of the industry. Publishing is, has been and will continue to be, in various forms, an extraordinarily profitable industry, with or without this particular set of publishers, writers and retailers.

Every time I see that line of thought, I can’t help but automatically assume the person speaking has no real-world argument to make, just more pixie dust and fairy tales. It’s kind of sad, too, that they’re “concern” for culture is coming during what is far and away the best time for communication in the history of civilization (no exaggeration). It’s never, at any point, ever been easier or cheaper (right down to free) to get anything you want to say out to anyone you want to say it to across virtually the entire globe. I think that shows the lie in their argument. It’s all about money to them and nothing else. To be clear, that’s a perfectly fine position to take, just don’t bullshit me with cultural concerns when it’s your paycheck that’s driving the argument. If we remove the commercial aspect altogether, it’s still the greatest time in mankind’s entire history if you’re trying to get your words and ideas out to the world.

That’s what I would offer for writers to take away from this. Open your eyes and take a look around. There are opportunities emerging everywhere every day. What we can do today and the numbers of people we can reach is truly amazing, unprecedented in human history. If you get so wrapped up in worrying about Amazon, you’ll miss it. Don’t get hung up on the whines and howls of folks who are just pissed that the world moved their cheese. You want a career in writing? Go and take one. Dump the bullshit memes of the past and get down to actual business, the kind those memes and the folks who propagate them have blocked writers from pursuing for decades going on a century.

Don’t make the mistake of previous generations of writers and think any of these people are your friends. Amazon’s not, nor is Barnes & Noble, nor any of the 2,000 small bookstores. They offer opportunities in various forms and shapes and sizes. But just like the opportunities publishers offer, they come with a cost. If you don’t know that cost, one day, a hefty bill may come due. And don’t weep for the agents and publishers, either. They were never your friends, though they liked to imply as much while they kept you ignorant of everything except the one act you do that directly makes them money. All they want is your book and the less you are involved past that, the better for them. Don’t wait for one of those assholes, whether they hail from a publishing house, an agency or a retailer, to come down from on high and grant you the keys to the kingdom. Odds are, you’ll be dust in your grave long before that ever happens. Requiescat in pace.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Can I Raise the Dead with the Amazonium Codexorum?

Now, back to where I started when i was so rudely interrupted by Kathleen Hale and her “light stalking.” I’m still not sure where light stalking rests on the hierarchy of criminal complaints; somewhere between a dash of armed robbery and a smattering of homicide, I think. But enough about her ridiculousness. This is what I was working on when I was sidetracked. Anti-climactic, I know, but then being sane and rational is always more dull than batshit crazy.

I got into a bit of a pissing contest in the comment section of a pretty solid piece on how crucial (or even accurate) the advance system used by publishers truly is by author William O’Neil on The Digital Reader site a couple weekends back. Normally, I let these things go, but in the last comment left by author Rick Chapman, in response to the moderator admonishing him for being too confrontational, he conveniently left a bullet point list of areas where he thinks I’ve been misled or not properly informed. Personally, I do so enjoy a good confrontational argument, so let’s go through it point by point. The discussion, by the way, bounced back and forth across various comments to the post. Feel free to go check out the entire thing at the above link, if you’re interested. Here’s the full comment, in italics, with my thoughts interspersed in plain type.

“I have been completely factual in my statements. Facts aren’t confrontational. Facts and dispassionate analysis are always acceptable. Dan, on the other hand, has made repeated misstatements of fact. I believe he has read too many times on too many sites assertions about Amazon that are misleading and untrue. These include:

* Amazon pays royalties. Amazon pays no one royalties except with the exception noted. Amazon should immediately stop making that claim and accurately describe what it’s charging you. A “retail usage fee.” A “download fee.” I’ll let them define it. But it’s not a royalty.”

I didn’t say anything about whether it was a royalty or not. I’m not sure it really matters, though. Generally speaking, a royalty is a negotiated percentage paid from the revenue (or some version of net) generated when you license a work for use. When I put something up on Amazon, I am licensing them to sell, reproduce, distribute, etc, the work. For that, under the terms of the license, I get 70% of the gross in defined price ranges and 35% of the gross in others. You can make a case that it is, at least, a form of royalty.

I don’t think it matters what you call it, however. The important thing to remember is the difference in the type of payment you get from a publisher and what you get from Amazon. With Amazon, the payment hasn’t had any production expenses incurred backed out or accounted for. It’s up to me to determine how to use that payment, in what percentages, to recoup my expenses. In this sense, I agree that it’s not always made clear and can often be presented as an apples to apples comparison when it’s not. Arguing whether or not it’s a royalty, a fee or whatever is a semantic exercise that has no real bearing on the facts at hand. Amazon’s payout is before production expenses are backed out or accounted for, one from a publisher is after. This could be made more clear and the 70% to 12.5% (or what have you) comparison is not strictly accurate.

To use a somewhat imperfect construction analogy, Amazon’s payment is like the check a contractor gets for work from a homeowner. The contractor has to pay labor wages, materials, etc, from that. A publisher’s payment is more like the paycheck a laborer receives from the contractor. You can make a good salary as a skilled laborer, but everyone in construction knows the real money is in being the contractor. I saw this phrase the other day and I like it, so I’m gonna co-opt it here. It’s called “Controlling the Capital.” Call it a royalty, call it an expense, you get a cut of the gross and you retain your IP. The cost of that is 30% and you cover production expenses (which you also control).

“* Amazon complains about agency pricing but imposes a modified version of it on indie publishers. Their margin is locked in a la agency; you have very limited pricing flexibility as I’ve noted. Accurately. And not every author is writing a book about the Zombie Apocalypse. Or Vampire Love. Or Dating Werewolves.”

Amazon still retains ultimate control over the pricing. As such, any price flexibility I have is at Amazon’s discretion. I’m not sure how much “agency” one can exercise when their actions are entirely at the discretion of another party. You can call it modified agency but when the modified part serves to restrict the agency part, it seems to be a bit of a misnomer. But again, it doesn’t really matter what you call it. I have no right to tell Amazon what to do, Amazon retains that power in total in its agreement with me. A big part of Agency type agreements is that the supplier has some or all of that control. I don’t. Amazon encourages me to price within a certain window by offering a higher cut of the gross in that range. I have limited freedom to price how I choose, even outside that range where I’d incur a lower cut of the proceeds.

But Amazon could change it at any point and I’d have no recourse to stop them, other than to pull my material. That’s an option not available to me if I’m under contract to a publisher, by the way. Can’t just pull my book from them if I don’t like what they do for me. That’s another benefit you’re paying for in that 30% cut, too. Flexibility is underrated and can be expensive if you give it up. Call it modified agency if you like, doesn’t matter. It’s not the same thing as a deal where the publisher can restrict or prevent discounting or otherwise dictate terms to the retailer. What it is is far more important that what it’s called.

“* Amazon is attempting to create a pricing codex. It says so on its website. I note that no one here will address that truly remarkable statement. If you would like to, I would like to hear your speculations on how the codex will be created, maintained, and enforced.”

(First off, here’s a link to the author’s piece about the pricing codex he believes Amazon is trying to impose, as background.)

I’m not sure what you’re point is here, that Amazon is trying to set up a pricing framework for different types of ebooks within its store? Why wouldn’t they? And how’s that tangibly different from the pricing structure publishers have put upon books forever now? Or is it just sheer random coincidence that books of similar style and form all seem to be priced within a few dollar range of one another? In fact, I’d argue that most of the more dramatic swings in pricing you see come from the retailer discounting or otherwise setting their own pricing. In this way, it could be said that the retailers ability to control prices has prevented publishers from establishing a hard and fast pricing codex, as you call it, of their own. The healthier, more competitive market, in my opinion, is when the retailer has more power over the consumer-facing prices rather than the manufacturer.

“* Amazon buys MOST of its E-books via wholesale, not agency. Amazon wants to stop agency pricing because it want to gain control over the E-book pricing structure. I neither condemn nor approve them. This is business. But their pricing box is part of that strategy. Again, I describe the motivation of both sides on my blog.”

I think you’re missing my point here. I’m not disputing whether Amazon is getting ebooks from publishers under wholesale, agency or any other terms. My point is that when you say they’re buying ebooks wholesale, that’s not correct. You could get me to agree that they’re buying licenses wholesale or they’re paying an agreed wholesale price with each license they sell, but they are not buying the ebooks. Ebooks aren’t sold, they’re licensed for use. You say they’re buying ebooks wholesale like they’re buying a pallette of print books and that isn’t the case. It may amount to the same ends but the difference between a sale and a license has huge implications for use and buyers’ rights. Amazon is clearly getting some sort of right of resale but they’re not getting it through first sale like they would if they were buying physical books. They’re getting it as part of the terms of the contract or the license they are acquiring to sell the end-user ebook licenses to consumers. What no one at any level is doing is buying the ebooks; wholesale, retail, agency or otherwise.

I think too many people play fast and loose with the term “sale” when discussing ebooks (myself included, sometimes). A sale has implications of title transfer and relating use and resale rights. None of that exists with ebooks. Now I’ve often argued that they should because the ways ebooks are distributed through retailers is nearly indistinguishable from a genuine sale. I think the licensing arrangement is a bit of a scam designed to both give the supplier more power and restrict the rights of consumers. But right now, that’s how it is. That doesn’t mean the basic differences between a sale and a license should be conflated. Especially when it directly impacts the rights one party in the transaction has with respect to future use.

“* Amazon’s pricing box HURTS indies. I’m not going to break it down in detail here; I’ll do that on my own blog. But you don’t have to be a marketing genius to figure out what’s wrong with a seven dollar pricing box.”

I’m not sure I agree with you here. There is a case to be made that heavily researched nonfiction work combined with Amazon’s pricing strategy can be problematic. Even Amazon said so. That sentence from them seems to be the basis for you codex theory. I just said it too. Am I tying to institute a pricing codex? It’s a fact that seems self evident. Ebooks are an extremely young market. Not every sector or contingency is properly served as yet. This is one of them, in my opinion. There are situations where $9.99 may not be adequate.

However, for the vast majority of writers, a $7 per book cut is more than sufficient and in most cases, downright great. In fact, that number amounts to several dollars more than a traditional author will be bring in per book on a $25 hardcover. That’s more than adequate. When you subtract the actual physical production/distribution costs with print, it’s more than most publishers’ take on that same $25 hardcover.

The $7 box you refer to constitutes a sizable range with margins from $2 to $7 per book. Indies writing strictly fiction aren’t harmed by that at all. In fact, it’s the range many of us, independent from Amazon, feel that the books should be priced. Even if I had total pricing control at 70% up to any list price I want, I still wouldn’t be putting up $12 or $15 works of fiction. That barrier at $10 isn’t even relevant to me because exceeding that price isn’t a consideration. It’s not harming me because it’s not even a factor.

I believe you could argue that by encouraging indies to stay in an optimal pricing range, they are actually increasing your overall margins on a book with the multiplier effect of increased sales at lower prices. For some nonfiction works, I agree, this can be problematic. For fiction, though, the $7 box isn’t destructive or harmful. It’s what most of us would be doing anyway.

“* The big publishers DO NOT have to live in that pricing box. Only indies do.”

Yeah, so? They have infinitely more influence, money and leverage than your average indie does. They can negotiate out of it. Or not, possibly, from what I hear. There’s some speculation that the S&S/Amazon deal has some sort of descending cut at higher prices. Still very likely better than having your take cut in half at $10, but enough to be a serious consideration in pricing. Besides, the “ceiling” of that box doesn’t matter when your best case for maximizing revenue doesn’t even approach that figure. If and when that factor changes, the discussion does too.

“* 30% points to use a downloading service is a very steep price to pay. Amazon’s NET margins on indie sales is close to 30 points because E-book publishing and distribution are electronic. No warehousing and shipping. Now, of course, you are free to not use their service. But it is accurate to note that 30 point margins are incredibly wonderful in most channels, never mind book channels. 65 point margins are beyond awesome but for an indie, ruinous.

Fortunately for the publishers, none of them are paying 65 point margins. Only indies face it. How nice for us.”

Fortunately for us, we’re not paying any kind of marketing fees or anything like that. Is 30% too high? Not really. Is 65%? Yes. I’m in complete and total agreement with you on that. As I said in one on my comments, I’d rather see a sliding scale where the percentage declines gradually in proportion to the increase in price in a way that still serves as an inducement to generally keep prices low but also allows for books like what you describe; higher production costs, a limited less-price sensitive audience, not likely to get a low price multiplier bump; to be able to collect a larger per book total revenue figure.

Amazon is providing access to millions of potential customers on by far the most popular ebook platform in the world. That’s worth something. I’m in the minority, though, who isn’t concerned that that percentage will drop. I actually think it will increase over time for two simple reasons. One, it’s a volume business. Higher volume means more sales means more revenue. That’s Amazon’s core belief. And two, anyone who wants to compete with Amazon in this space and attract quality work is going to have to offer a better cut, and that will drive an increase in the percentage available to indies. Don’t underestimate subscription services, either. If it comes to show that Kindle Unlimited makes some kind of dent in sales, Amazon may well have to sweeten the pot to keep writers and their books in the program.

“Amazon’s pricing strategies undercut the entire theme of your article. Let’s say you do want to write a piece of “literature” or perhaps a specialized history on a topic most people find obscure. That means you have a far more limited audience that someone writing about Vampire Love. Or Dating Werewolves. Or Bondage with Billionaires.

Yet, the time and effort to produce that work will be as great, if not far greater, than that required to do your research on the best way to flog a besotted masochist.

And then you are stuck in Amazon’s pricing box trying to sell a book that can’t pay back your time and effort at $9.99. The audience isn’t big enough to make up in volume what you’ve lost in revenue. And, of course, since you are an indie, you’re going to have pay for ALL the expenses incurred by having to market and sell your book. And you will have 30 points less revenue to do it because you will be paying that money over to Amazon right up front (and don’t forget the transmission fees, which you also pay).”

Here’s where I can see your point. The problem, though, is that if you have a book with an inherently limited market, good luck getting a publisher to fork over a sizable advance or do any marketing at all for it. If it’s a captive audience at a high price point who will pay $15 or $17 or more for the ebook, the assumption you’re making is that a lower price point isn’t going to increase your overall market. I’ve seen this argument from writers before with the notion that anyone who will pay $8 a book will pay $12 and you’re just leaving money on the table. I didn’t buy it then and I don’t buy it now, with very few exceptions. And those exceptions, in my mind, are almost entirely complex scholarly work. I don’t think that’s reasonable. That doesn’t mean I don’t think higher prices are justified for some work, just that I’m not sure that high prices combined with a publisher getting 70-80% of the proceeds (or more) is going to pay back your time any more than you keeping 70% at a lower price point. As for 30% percent being too much, remember, that’s the number the publishers themselves imposed on Amazon with their collusive agency deal. If it’s so egregiously wrong, why did they break the law to Institute it themselves?

“Indies in these markets are driven, by necessity, back to the major publishers who may be able to price your product at a level you hope will make your time and effort somewhat profitable. And relieve you of the cost of marketing. Because they don’t live in the box.

Or, maybe, they can apply to be a member of Amazonium Codexorum. If they can demonstrate the “legitimate” reasons to be on the approved list.”

I love the phrase “Amazonium Codexorum” by the way. Every time I see it, I can’t help but think of some dark tome bound in human skin and written in blood that Jeff Bezos is using to cast his evil black magic to raise the dead and dominate the world. You seem to be thinking that Amazon is planning to create some beurocracy that gives thumbs up or down like a Roman Emporer on a case by case basis on whether they’ll be allowed to price above $10. I don’t think that’s the case. I believe it’s far more likely that they’ll try to institute a pricing range, much like KDP, that aims to find an optimum price for maximizing revenue for these works and incentivizes it by paying higher percentage in the preferred range. Amazon won’t be deciding anything. Publishers will be self-segregating in those ranges because it’s in their best interest to do so, making the granular case by case decisions on their own, just like indies do.

As for high-cost-to-produce nonfiction, I’m not sure why you assume $9.99 isn’t sufficient to generate a good return unless you’re presuming a market with a hard ceiling, i.e., a strictly limited potential paying audience. But if that exists, publishers aren’t exactly going to be lining up to dump resources into it either. You’ll still be doing most, if not all, of the marketing and getting a far smaller payout at the end of the day.

But here’s the kicker, if what I have to do to be successful doesn’t fit with what’s available to me through Amazon, I won’t use them, or I’ll adapt what I’m doing in some way so what they offer serves my ultimate ends. Amazon is known for its commitment to low prices. If you have a project that needs high or, at least, higher pricing, the low price store may not be the way to go. If I had a high-end designer clothing line, I’m not trying to cut a deal to get my wares stocked in Dollar General unless I’m prepared to sell them at $5 a shirt. I’ll look to outlets that support my needed price and can produce the customers who will pay it. It’s entirely possible that neither Amazon in its present form nor the publishers in their’s are the best choice for this kind of work.

As I said, ebooks are an extremely young market. This is a potential class of books that’s underserved by what’s currently available to them. I’d dispute that you can’t make a good return on $9.99, considering you still retain the IP (control the capital). Maybe you can’t make it all from Amazon, but nothing is stopping you from exploiting that property in multiple ways. In my opinion, Amazon is best used as one stream of many. Some trickle, some roar, some are steady year round while other others run high and low seasonally. And some do inevitably dry up. If the pricing structure for one particular product form for your IP at one particular retailer, no matter the size, can make or break you, you need to get more baskets and spread those eggs out a little.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Counter-Points To My Earlier Points

I made the arguments earlier. Now here’s the rebuttals (sort of). And the rebuttals to the rebuttals. Yeah, I’m three degrees deep in arguing with myself about obscure market competition issues on a Sunday. What of it?

When I talked about Oliver Wendell Holmes arguments in his dissent, I skipped over this part. In retrospect, he’s got a bit of a point. But only to a point.

“What really fixes that (prices) is the competition of conflicting desires. We, none of us, can have as much as we want of all the things that we want. Therefore, we have to choose. As soon as the price of something that we want goes above the point at which we are willing to give up other things to have that, we cease to buy it and buy something else. Of course, I am speaking of things that we can get along without. There may be necessaries that sooner or later must be dealt with like short rations in a shipwreck, but they are not Dr. Miles’ medicines. With regard to things like the latter, it seems to me that the point of most profitable returns marks the equilibrium of social desires, and determines the fair price in the only sense in which I can find meaning in those words.”

If things get too expensive, people stop buying. The market’s self correcting in a way. In that sense, what does it hurt if Hachette wants to price itself out of the range of a large percentage, if not most, of the people interested in buying ebooks? It’s their funeral. And, hey, maybe people in large numbers will be willing to pay higher prices. Doesn’t Hachette deserve the opportunity to sell its product for the maximum price it can muster?

Of course they do. The only thing is Hachette isn’t capable of selling directly to customers, at least not on a scale sufficient to support their annual sales and revenue needs. If they could, they wouldn’t need anything but their own storefront. To reach those readers, however, they need retailers. Specifically, they need Amazon. Hachette’s maximum price isn’t what the reader will pay, it’s what the retailer (or wholesaler) will pay. The retailer is the one with the direct connection to the customer, the one with first hand knowledge of what constitutes a reasonable price to the customer. Why should Hachette be entitled to preferential treatment in being able to restrain Amazon’s trade just because it needs something from them but doesn’t like the terms it’ll have to pay to get it? Hachette has the right to seek the maximum price it can get, yet Amazon doesn’t possess that same right? Amazon must have its interests inhibited so Hachette’s can be fulfilled? What is the basis in law for that distinction, that preferential position that Hachette seems to want?

I think you’ll find that the equilibrium of social desires, as Holmes calls it, isn’t going to be found by restricting price competition among retailers. And because we’re talking about preventing retailers from making pricing decisions, if things do go south from suppliers overestimating what the public views as a reasonable price, they’ll have no recourse but to sit there and watch money float right out the door. If retailers can’t make pricing decisions, even in the face of their own survival, giving manufacturers control of retail pricing can do a hell of a lot of harm.

The other point I wanted to make is with regards to the concept of a title to goods being transferred through a sale and the rights to that transferring with it. With ebooks, and all digital goods in this vein, there is no title being transferred. Amazon isn’t buying ebooks from Hachette, they’re selling them, much like consignment. If the title to the product doesn’t transfer, then it follows that the rights of the producer won’t be terminated at the point of sale. So it is conceivable Hachette, or others, may have the power to dictate additional terms to retailers, possibly even under copyright in ways it didn’t apply when sales were sales and title went with them.

However, the kicker here is that in order for Amazon to sell those ebooks, Hachette has to license them to do so. The terms of said license are the result of…wait for it…negotiation! Hachette doesn’t magically gain more leverage even if the title to the product remains with them.

This is the result of an issue with digital goods that will need to be addressed at some point. When products are effectively sold but, through legal definition, are only licensed, it puts the balance of power in the market off kilter. It, potentially, grants manufacturers the ability to vertically fix prices if it can do so, and exercise controls or restrictions/the elimination of further traffic in future sales. This means the consumer’s bargain of granting the producer limited exclusive rights is no longer being balanced by those rights for themselves once they’ve made the purchase. The consumer is still implicitly giving something up but no longer getting anything in return.

The situation here, however, is that Hachette (or all of the individual Big 5 independently with the possible exception of PRH) don’t possess the leverage or the will to sacrifice what it would take to get any significantly sized retailer on board with those terms. Short of working in unison (been there, done that, wrote checks for tens of millions) or Uncle Sam changing the ground rules in their favor, the title transfer issue is not one they’ll be able put to much use.

Eventually though, that’s going to become an issue. If I had to guess, I’d say it’ll start as a dispute between a customer and a retailer and mushroom out from there before a court somewhere rules that the licenses used here are indistinguishable from a sale. Then all hell breaks loose. I can’t wait!

If I were one of these publishers, I’d try to get ahead of this game by working to set up some second hand markets and make certain I was in for a sizable cut while I still had the leverage. The downside is what? Resale will undermine the value of books and drive prices downward? Subscription services, the persistence and growth of indies publishers selling at much lower pricing tiers and consumers understanding that ebooks offer less value than print versions, even paperbacks, and should be much cheaper are already doing that. Right now, resale can’t exist without the consent of the copyright holder. Such a market needs their approval to happen. That makes their signature very valuable at the moment. However, wait until a judge, a consumer agency or some legislation changes things to where digital resale markets don’t need their consent and they’ll be out in the cold. Remember this, though. When it happens, and it will eventually, publishers will be caught in yet another lurch of their own making through lack of vision and even more inexcusable lack of action.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron

Agency and Anti-Competitive Behavior: Looking back a century

I was reading Barry Eisler’s takedown of the most recent Amazon hit piece (Surprise! From yet another author with a book under contract to Hachette who didn’t think it necessary to disclose that fact. Funny how often that happens. You’d almost think it was a pattern of intentionally misleading readers into believing they don’t have a direct financial stake in the matter. Yeah, almost). During a comment I left there, I went back and plucked a quote or two from an old SCOTUS decision ruling against agreements that allow a manufacturer to fix the retail price of their goods. As I glossed over the text of the case, I found many interesting points of reference.

Now understand, this is from a century ago. These issues have been adjudicated again and again over the years, so this case is in no way binding or even any sort of standard for how these deals are dealt with today. But as I was reading it, I was struck with how much sense it made. Perhaps this is one instance where the traditional ways of thinking about something (resale price maintenance agreements or vertical price fixing, if you will) truly should have been maintained.

The case, Dr. Miles Medical Co. v. John D. Park & Sons Co. (220 U.S. 373, 1911) involved a pharmaceutical company who created a network of contracts with both wholesalers and retailers whereby to access their products, they had to agree to numerous stipulations about the resale of those goods, most importantly related to a minimum price they were allowed to sell to the public, under penalty referenced in the contract. The company refused to sell to any entity that didn’t agree with its dictates and further, was attempting to squash a retailer who managed to get its products and was selling them below their required costs. Dr. Miles lost this particular case, the court finding at the time that the company had no statutory legal right to impose such requirements on wholesalers or retailers and, further, such agreements, enforced only through the “monopoly of production” as the Court put it, ran afoul of the Sherman Antitrust Act.

Much of the following is from Justice Charles Evans Hughes writing the majority decision, with some excerpts from other applicable rulings. I’m also choosing to quote liberally, taking longer blocks of thought in some places. If I learned anything from the Orwell kerfuffle, it’s to read the entire line of thought, not simply the one or two sentences you agree with. Here’s a link to the full text of the ruling, including the dissent penned by none other than Oliver Wendell Holmes, that’s also fascinating for how similar it is to some of the pro-Agency arguments I’ve seen in its lack of concern for competition and the best interests of consumers. It’s super-long and pretty dry, lawyerly stuff, but well worth the read if you have any interest in the background of what Agency actually means and what it does in market conditions. I’ve excerpted a few high points to discuss. The bold type is my own added emphasis.

“But this argument rests on monopoly of production, and not on the secrecy of the process or the particular fact that may confer that monopoly. It implies that if, for any reason, monopoly of production exists, it carries with it the right to control the entire trade of the produced article, and to prevent any competition that otherwise might arise between wholesale and retail dealers. The principle would not be limited to secret processes, but would extend to goods manufactured by anyone who secured control of the source of supply of a necessary raw material or ingredient. But because there is monopoly of production, it certainly cannot be said that there is no public interest in maintaining freedom of trade with respect to future sales after the article has been placed on the market and the producer has parted with his title. Moreover, every manufacturer, before sale, controls the articles he makes. With respect to these, he has the rights of ownership, and his dominion does not depend upon whether the process of manufacture is known or unknown, or upon any special advantage he may possess by reason of location, materials, or efficiency. The fact that the market may not be supplied with the particular article unless he produces it is a practical consequence which does not enlarge his right of property in what he does produce.”

Here’s the idea of “monopoly of production.” From the book trade, only Hachette can produce Hachette books. They are the only source. They have a monopoly of production on Hachette books. What they’re trying to say, and what Justice Hughes is refuting here, is that this monopoly of production gives them rights to control the product, specifically it’s pricing, after its been transferred to another party. Dr. Miles was telling people who bought their drugs what they could sell them for. Hachette is trying to tell Amazon what to sell its books for.

Note the implication that the reasoning behind this is to inhibit or prevent competition. Hughes certainly didn’t. He makes a clear point that once a product has been placed on the market, the title transferred (sold) to another entity, that the public interest is in freedom of trade in future sales. Dr. Miles was arguing just the opposite, and by extension, so is Hachette. They want to restrain trade in that area. I think it’s telling that the principle weapon most of those calling for action against Amazon for its market power advocate for is, itself, a form of restraint of trade against retailers.

I also like the last sentence there. Just because you’re the only one who can produce or bring your products to market, that doesn’t mean it gives you any more rights of property than anyone else. No special snowflakes need apply.

“Nor can the manufacturer by rule and notice, in the absence of contract or statutory right, even though the restriction be known to purchasers, fix prices for future sales. It has been held by this Court that no such privilege exists under the copyright statutes, although the owner of the copyright has the sole right to vend copies of the copyrighted production. Bobbs-Merrill Co. v. Straus, 210 U. S. 339. There, the Court said:

‘The owner of the copyright in this case did sell copies of the book in quantities and at a price satisfactory to it. It has exercised the right to vend. What the complainant contends for embraces not only the right to sell the copies, but to qualify the title of a future purchaser by the reservation of the right to have the remedies of the statute against an infringer because of the printed notice of its purpose so to do unless the purchaser sells at a price fixed in the notice. To add to the right of exclusive sale the authority to control all future retail sales, by a notice that such sales must be made at a fixed sum, would give a right not included in the terms of the statute, and, in our view, extend its operation, by construction, beyond its meaning, when interpreted with a view to ascertaining the legislative intent in its enactment.'”

The statute referred to there is copyright. Our current situation isn’t the first time publishers tried to fix retail prices for books. The case here is from 1908. A publisher included a disclaimer on the copyright page of their books that said selling this book under the price printed on it constituted copyright infringement. They were interpreting the “exclusive right” to produce and sell conferred to authors and creators in copyright statute as meaning it gave them the right to control the uses (prices) of the books after they’d been sold (title transferred).

Notice, again, the intent of this action was not to simply sell copies but to qualify the title of the buyer, restrict what they can sell it for after they’ve bought it. See a pattern developing? The publisher lost this case, by the way. Also note the phrase “in the absence of contract” in the first bold quote there in relation to the ability to fix prices. That relates directly to this next part:

“Whatever right the manufacturer may have to project his control beyond his own sales must depend not upon an inherent power incident to production and original ownership, but upon agreement.”

There’s the thing. These deals weren’t even totally illegal then if, and only if, they resulted from a fair, willing agreement of parties. If a retailer liked, they could grant this right to a manufacturer in a contract and it would be perfectly valid. My question is why would they? What kind of incentives would a manufacturer have to offer to entice a retailer to willingly allow it’s trade to be restrained? That’s probably why there aren’t too many of these types of agreements without some severe power imbalance in favor of the manufacturer or some form of coercion.

The publishers couldn’t get Amazon on board through negotiation, they didn’t have enough to offer for them to even consider it, so they colluded to force it. Now, they’re in the same boat. Want the world, don’t possess the resources to get it. It’s got to be frustrating, especially when you’re a company that used to possess just such leverage and resources. But that’s the way this works. You have to earn your leverage. You don’t just get it because you want it. I suspect that’s why the contract exemption exists. No retailer would accept a deal like that in absence of some likely illegal coercion without a damn good reason for doing so. Amazon certainly doesn’t have one, and I have a hard time envisioning what a publisher like Hachette could possibly bring to offer that would even make a dent. A much higher cut of the proceeds to Amazon would seem like a minimum starting point and I doubt that would even really open the conversation. That’s the thing, in the absence of government mandate or intervention, an Agency type agreement is never going to be willingly negotiated between a healthy retailer and book publishers. Which, again, is calling for special dispensation from government that other industries don’t get.

“The present case is not analogous to that of a sale of goodwill, or of an interest in a business, or of the grant of a right to use a process of manufacture. The complainant has not parted with any interest in its business or instrumentalities of production. It has conferred no right by virtue of which purchasers of its products may compete with it. It retains complete control over the business in which it is engaged, manufacturing what it pleases and fixing such prices for its own sales as it may desire. Nor are we dealing with a single transaction, conceivably unrelated to the public interest. The agreements are designed to maintain prices after the complainant has parted with the title to the articles, and to prevent competition among those who trade in them.”

Third time’s a charm. These agreements are designed to prevent competition. Everybody now! The earlier portion of this is interesting, too, in that it clearly notes that the manufacturer is giving up nothing while simultaneously taking rights away from retailers (and wholesalers, in this case). See my previous comments on agreements. You’ve got to give a little to get a little and, in cases like this, the manufacturer doesn’t want to give at all, only take.

“The bill asserts the importance of a standard retail price, and alleges generally that confusion and damage have resulted from sales at less than the prices fixed. But the advantage of established retail prices primarily concerns the dealers. The enlarged profits which would result from adherence to the established rates would go to them, and not to the complainant. It is through the inability of the favored dealers to realize these profits, on account of the described competition, that the complainant works out its alleged injury.

If there be an advantage to the manufacturer in the maintenance of fixed retail prices, the question remains whether it is one which he is entitled to secure by agreements restricting the freedom of trade on the part of dealers who own what they sell. As to this, the complainant can fare no better with its plan of identical contracts than could the dealers themselves if they formed a combination and endeavored to establish the same restrictions, and thus to achieve the same result, by agreement with each other. If the immediate advantage they would thus obtain would not be sufficient to sustain such a direct agreement, the asserted ulterior benefit to the complainant cannot be regarded as sufficient to support its system. But agreements or combinations between dealers, having for their sole purpose the destruction of competition and the fixing of prices, are injurious to the public interest and void. They are not saved by the advantages which the participants expect to derive from the enhanced price to the consumer.”

What he’s describing there is horizontal price fixing by a cartel of retailers. And he equates the end result of manufacturers controlling retail prices precisely to that. The results are the same. He also makes no bones about describing such deals as having the sole purpose of destroying competition. We wouldn’t want a group of retailers to band together and fix prices. Somehow, though, we should be in favor of it when it’s manufacturers, even though the ultimate results are the same?

See what happened here? The dealers who signed the agreements didn’t like the competition from the ones who didn’t and sold underneath the manufacturer’s required retail price. The competition cut into their guaranteed profits. Here’s a way a manufacturer could entice a retailer, with the notion of larger, locked in profits. There’s a counter argument to that relating to sales volume and how you actually attract sales if there’s no retail competition to speak of. Is a higher profit per item but fewer sales (and little means to spur them) actually good for a retailer? But that’s a different matter. What’s happening here is that Dr. Miles isn’t simply setting the retail price after title has been transferred, they’re actually picking winners and losers among retailers. They’re not only restraining trade but deciding who gets to engage in competition and to what extent that competition is allowed to go. It’s the “give ’em an Inch and they’ll take a mile” theory.

“The complainant having sold its product at prices satisfactory to itself, the public is entitled to whatever advantage may be derived from competition in the subsequent traffic.”

Yes, the public is. That’s part of the deal. Everyone in the chain has rights up to the point they give up title to the property. Their rights stop there, transferred to the buyer, until they themselves give up title. It’s how things work. Giving anyone in the chain power to dictate actions of participants you should no longer have control over throws everything out of balance. There’s a huge difference between not being able to get most favorable terms from a retailer, as Hachette seems unable to do, and forcing those terms on them through a restraint of trade. It’s very difficult to argue that manufacturers controlling retail prices is anything but a restraint of trade against retailers. The key here is, with that restraint, the public doesn’t benefit from the competition of subsequent traffic in the goods. There is no competition. This breaks the covenant. Everyone has rights. Stay in your lane. In these scenarios, manufacturers benefit while retailers lose autonomy and consumers lose the price benefits of competition. And they are doing so by claiming a right based on a monopoly of production.

This last part is from the dissent in this ruling, written by Justice Oliver Wendell Holmes:

“What, then, is the ground upon which we interfere in the present case? Of course, it is not the interest of the producer. No one, I judge, cares for that. It hardly can be the interest of subordinate vendors, as there seems to be no particular reason for preferring them to the originator and first vendor of the product. Perhaps it may be assumed to be the interest of the consumers and the public. On that point, I confess that I am in a minority as to larger issues than are concerned here. I think that we greatly exaggerate the value and importance to the public of competition in the production or distribution of an article (here it is only distribution) as fixing a fair price. What really fixes that is the competition of conflicting desires.

We, none of us, can have as much as we want of all the things that we want. Therefore, we have to choose. As soon as the price of something that we want goes above the point at which we are willing to give up other things to have that, we cease to buy it and buy something else. Of course, I am speaking of things that we can get along without. There may be necessaries that sooner or later must be dealt with like short rations in a shipwreck, but they are not Dr. Miles’ medicines. With regard to things like the latter, it seems to me that the point of most profitable returns marks the equilibrium of social desires, and determines the fair price in the only sense in which I can find meaning in those words. The Dr. Miles Medical Company knows better than we do what will enable it to do the best business. We must assume its retail price to be reasonable, for it is so alleged and the case is here on demurrer, so I see nothing to warrant my assuming that the public will not be served best by the company’s being allowed to carry out its plan. I cannot believe that, in the long run, the public will profit by this Court’s permitting knaves to cut reasonable prices for some ulterior purpose of their own, and thus to impair, if not to destroy, the production and sale of articles which it is assumed to be desirable that the public should be able to get.”

So answer me a question: if there’s no competition in production, no competition in distribution and you’re supporting agreements that restrict or eliminate competition in retail, when exactly should we be concerned about the value of competition to consumers? I suppose there’s no point in worrying about the value of competition when there isn’t any. I’m stunned by his blunt statement that Dr. Miles knows best and that we must assume the retail prices they are requiring are reasonable. Why, in the name of all things great and holy, would you assume that? His colleagues who supported this ruling certainly didn’t. In fact, I would argue just the opposite. You allow someone outsized power unearned by statute or not gained through the crucible of competition, and I think you have to assume their retail price is not reasonable until shown to be otherwise. Power unchecked by competition doesn’t usually result in best case scenarios for customers. It slows innovation and raises prices. Say what you want about Amazon being a monopoly, there is very little doubt that they behave in a fiercely competitive manner. I’m not sure the same can be said for Hachette or any of the large publishers. More the veneer of competition wrapped around what they perceive as an already divvied up industry.

His point at the end is almost word for word something I’ve seen from publisher supporters. If they can’t charge what they want, they’ll stop producing and the public interest is damaged in turn. It’s nonsense. They can’t do it? So stop. No one cares. Their writers will find other outlets, books will continue to be made and sold and read in the millions upon millions. The life or death of a Hachette is totally irrelevant to the totality of the industry. It is relevant to the people whose livlihoods depend on them. That’s why they should be doing everything they can to stop the self destructive stupidity and hubris that has overtaken the company. Your paycheck depends on it. Amazon is not the one who’ll be pulling your next book contract or laying you off in a year. Amazon will be saying, “you know, we just wanted to sell more of your books. And we wanted you to get paid more while doing so.”

Here’s my point: no one wants Amazon to become an all-consuming monster. Everyone has concerns about their market size and how they decide to wield the power that comes with that. But, as yet, there’s nothing illegal about what they’ve done. The publishers, including Hachette, can’t say the same thing. When you talk about Agency contracts, understand what’s being discussed isn’t simply a different business model, it’s a departure from the basic market structure we’ve had for a very long time. Allowing manufacturers to dictate retail prices to stores isn’t a right they should have, it’s one they specifically don’t have because, in order to do so, it involves instituting a restraint of trade against those stores. More than that, as this case even illustrated, the manufacturer in control of these agreements, garnered through its own monopoly of production, gains more than pricing power, they gain the ability to preferentially choose winners and losers among retailers and even who is or isn’t allowed to compete at all.

Negotiation and a willing arrangement is the proper way to pursue deals like this, its worst excesses kept in check by the give and take of deal making. But the publishers failed at that. They didn’t have the right incentives to negotiate a deal. So they moved on to collusion to force the deal through. That didn’t work either as the DOJ was all over it almost immediately, the attempt was so blatant. Now, having failed to negotiate or coerce a deal, the next step is to cry to the government to step in and force the issue. That, I’m certain, is every bit as doomed to failure. There’s a point where you have to let go of the way you wish things to be and deal with the way things actually are. The longer this particular fight goes on, the farther behind the companies most embroiled in it will fall.

If you’d like to argue that we should get rid of all the anti-competitive actions in publishing, from every side, then that’s an idea I fully support. But by arguing that publishers should have the right to price however they want, that’s not what you’re advocating. You don’t want to clean the industry of anti-competitive behavior, you just want to be the only ones allowed to use it. Arguing for anti-competitive behavior (and resale price maintenance agreements are anti-competitive by nature) to combat what you perceive as other anti-competitive behavior is a non-starter. If my neighbor breaks into my house and steals my tv, then the next night, I break in and steal his tv, we’re both going to jail. I may seem justified but really I’d be just as wrong.

Editor’s Note: If the previous 4,000 words weren’t enough for you, here’s 1,500 more where I make some rebuttals to myself here, and then rebut those rebuttals.

Dan Meadows is a writer living on the banks of the Chesapeake Bay. Follow him on Twitter @watershedchron