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·Future Nine Corp..

Hachette vs Amazon, battle of giants, or David vs Goliath?

I've seen and read a bit about the Hachette vs Amazon dispute. Popular opinion seems with Hachette. Authors such as Colbert and Rowling may help make a good public case for Hachette. Amazon doesn't seem as talkative.

Both companies seem large. A decent summary of the dispute seems to be here - »www.publishersweekly.com/pw/by-t···ght.html . If the article is correct our DOJ sued Apple and several large book publishers over price fixing.

Some companies settled, and offer up to a 30% discount for e-books as part of the settlement. Others like Hachette, seem to have taken a different path, and Hachette is up first, negotiating with Amazon.

Whatever happens, if Hachette is the first of five large publishers to negotiate with Amazon post DOJ price fixing, it is likely this will set a pattern for other publishers.

People who like Hachette, have begun to tag Amazon as disruptive or a disruptor. My guess is this is an alternative to innovative or innovator.

Could part of the dispute be the necessity of a publisher for authors? Is Amazon forcing changes to relationships between customers, authors and publishers which aren't good for publishers?

It would be nice to know more of the details. If Hachette wishes to raise book prices to customers, or limit ebook access, my tendency would be to support Amazon. If Amazon is trying to get an exclusive low cost, beyond any prior discount, maybe Hachette is the wronged party.

Does anyone have additional information?
Congress could mess up a one piece jigsaw puzzle.

Ignore Button. The coward's feature.
Mentor, OH
Hachette is a publisher, where as Amazon is a retailer first, and then an independent publisher second.

I recall a few years ago, Apple got "slapped" because it was manipulating e-book prices in it's book store.

Publishers are angry right now because the internet stole their power from them. Before if a writer wanted to be published, he'd have to write several books and get rejected several times, before getting a contract for a book. Hence the publishers held the power. But like music and programing, authors are able to self publish. Thus cutting out the middle man, and keeping more money for themselves. As well as charging less per book.
I will say buying a book published by a publisher grants you some promise that it will be good. Nut not all published books are good.
Where as finding good self published books maybe like looking for a bitcoin. They are out there, but are rare.

So add publishers to the butt hurt list over the internet. They reside along with TV execs, Hollywood studios, and record labels.
vivere est mori.

Independence, OH
reply to pandora
I think this one of the companys that got sued for price fixing so I don't trust them!

Space Elf
Mullica Hill, NJ
reply to Snakeoil
This is something I think that is a big deal and its even bigger as time goes forward.

I think independents are drawn to an amazon because while they cannot get an editor like a traditional publisher they do get all the money and they do not get completely screwed(afaik someone digital publishing on Amazon retails their copyright. Many first time writers will have to sell it to the publisher. I know this is how new bands get screwd by the labels the only contracts usually made for them include loss of lots of IP rights.)
Filan - Aurin Spellslinger - Pago - Team Legacy


Lancaster, OH

1 recommendation

reply to pandora
It seems a few authors are speaking up for Amazon in the Hachette vs Amazon feud

·Google Voice
·Future Nine Corp..
reply to pandora
Just a follow up, more information has been released about this dispute. See - »readersunited.com/

From the above link -

e-books are highly price elastic. This means that when the price goes down, customers buy much more. We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that the lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that's 74% larger. The pie is simply bigger.

I'm guessing Amazon can back it's claim up. If true, lower ebook prices are better for authors and book sellers.

It goes on -

We recognize that writers reasonably want to be left out of a dispute between large companies. Some have suggested that we "just talk." We tried that. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle. We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Then we suggested that authors receive 100% of all sales of their titles until this dispute is resolved. Then we suggested that we would return to normal business operations if Amazon and Hachette's normal share of revenue went to a literacy charity. But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though e-books represent 1% of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle.

The page linked above has other links, and a link to the email of Hachette CEO, Michael Pietsch.

I understand now that Amazon intends to keep the price of ebooks low, it has determined $10 is an appropriate high price, and is going to fight long and hard to win.

Hachette seems equally determined to win on higher prices.

As Hachette, Amazon, readers and authors seem to all win at about a $10 price point, it's tough to see why this hasn't been resolved, or why there is confusion.
Congress could mess up a one piece jigsaw puzzle.

Facts do not cease to exist when ignored

Milwaukee, WI

1 recommendation

said by pandora:

As Hachette, Amazon, readers and authors seem to all win at about a $10 price point, it's tough to see why this hasn't been resolved, or why there is confusion.

Because Hachette can't let go of their outdated pricing controls. We've all seen this same resistance with the music and movie industries. They want things their way and anybody that doesn't agree is trying to destroy their industry.
“Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge.'” Isaac Asimov


reply to pandora

you're falling for Amazon's PR spin i think.....

said by pandora :
As Hachette, Amazon, readers and authors seem to all win at about a $10 price point, it's tough to see why this hasn't been resolved, or why there is confusion.
amazon win at $10 - but Hachette probably don't, and that's why:

let us suppose that, on the "many titles" amazon've measured {and somehow i doubt amazon are able to actually simultaneously sell the same e book at both prices so i'm rather sceptical their evidence is what they would like us to believe.......} you can sell 74% more ebooks - quite clearly some at least of those sales actually take revenue from Hachette - because they replace:
a) other ebook sales of the same title not through Amazon (and not for a Kindle - amazon has 60% of the US ebook market)
b) sales of a "physical" copy of the book* (through amazon, or much more likely elsewhere and quite probably at full price - amazon has only 15-30% of the physical book market in the US for major publishers...)

on either of which Hachette make more money than the $10 ebook via Amazon (in the case of the hardback a lot more)

but perhaps more to the point, price elasticity is unlikely to be uniform over titles..... for some there will be very little increase in sales. Stephanie Meyer, the author of the Twilight saga is published by Hachette (116m copies of her 6 books so far) - you really think she'd sell 74% more with a price cut? - more likely almost no increased sales just lower revenue for her, and Hachette {and amazon too - but amazon can sell other crap to the buyer lured to their site by the cheap ebook...and of course Kindles....} likewise James Patterson, or JD Salinger (65m copies so far of Catcher in the Rye.... ) also Hachette authors

what people forget is that Printing a book is not expensive for a publisher (unless it's a ridiculously small print run...) {UK costs are about £1.60 for a hardback novel, or £0.70 for a paperback.... in the US (see below) all additional costs associated with a printed rather than "e" book are under $2-3...}

also what publishers want to do (and authors too if they are smart) is practice "price discrimination" - i.e. (in amazon's terms) eg charging $14.99 (or more) on first release, then dropping the price a few months later to still hoover up all the sales available at a $10 price - but with a better margin on those who just can't wait for the new title everyone is talking about, or which they've been waiting for since reading the one before, than those prepared to wait.....

since publishers can, and do, do this, there is not added sales by pricing at $10 from the get-go (indeed there's actually less, since price differentiation allows them to go on to be below $10, which amazon's market-rigging suggestion would not

The trouble is that in this and previous efforts, Amazon misstates and misleads on the numbers. Two weeks ago, the same Amazon Books Team posted a note on its Kindle forums that tried to establish why a $9.99 book price made more sense than $14.99: the same ebook priced lower supposedly sells 1.74 times as many copies. Amazon claims it has done this analysis across many titles, even though that makes little sense since it’s in a position to know that no arbitrary book will automatically sell more copies because it is priced lower. Many particular books may exhibit changes, but in order to test this, Amazon must have engaged in presenting different prices to different customers, changing prices for periods of time, and so forth. No two books are identical, so their testing had to be using the same book and exposing different prices. This yields some broad information, but isn’t applicable in every case.

More broadly, Amazon’s erratic response ignores most of the realities of publishing. The publishers in question, and most publishers, continue to print books as well as issue them in ebook editions.... As a result, publishers have to deal with the cost of production across multiple media: ebooks are not magically free to make once you have a print book. (I’ve experienced this first hand, as have many other Take Control authors.) Plus, any potential profit from a single book has to be spread across the various formats in which it appears. Conventional publishers who produce hardcover editions want to keep the initial ebook price high — though low relative to the print equivalent — to avoid eroding the lucrative margins on hardcover sales. When hardcover sales ebb, publishers then typically produce a paperback edition, and cut the ebook price, often to below $10, if it was above that price to begin with. Over time, ebook prices for the same title tend to drop as demand lags.
Hachette’s CEO responded to people who followed Amazon’s advice to write him, and the details he provided are more in line with what is publicly observable and which those of us in publishing know to be true. Among other things he notes that 80 percent of Hachette’s titles are priced at $9.99 or less; most of its more expensive books are $11.99 or $12.99; and the publisher's cost differential for print books is about $2 to $3. That last point is disarming: by admitting the actual difference, he also reveals the economics of pricing across both formats and time. So it’s not really about pricing in general, but timing. To be more precise, it seems that Amazon is proposing that readers don’t need to wait for the market to reflect the price Amazon wants to charge immediately. What Hachette is saying (and is the truth) is that pricing is based on demand: some people are willing to pay more to have a book sooner. Readers know that a paperback costing 40 to 60 percent of the hardcover price will eventually appear, and that used copies will eventually become available (on Amazon, no less) at 5 to 20 percent of the new hardcover price. And yet people persist in buying expensive hardcover editions to be able to read the latest and greatest right away. That, my friends, is the market: publishers are not delivering penicillin to the Arctic; buyers are not heroin addicts who have no control over their actions.

*physical books are, of course, more expensive than ebooks, but quite apart from the (not entirely positive - physical books take up shelfspace) tactile experience of having a book, one has many more rights as a purchaser of a book - you can lend it to a friend, sell it on after you've read it, donate it to a charity etc. - you can't do that with an amazon ebook unless you lend the kindle, and therefore one's entire ebook library

·Google Voice
·Future Nine Corp..
You are likely correct, the problem IS more complex than just a $10 cap on e-book pricing.

Some of the problem may be that Amazon permits self publishing, and publishing on Amazon is easy and can be profitable. Writers may move to Amazon and leave publishers if they can't get a decent deal.

IIRC Harry Potter was rejected by many publishers before one was found that gave it a chance. If Amazon publishing had been around at the time, Rowling may have made more money, faster, and not have contracted with a publisher.

For publishers Amazon isn't just a retailer, it's competition for authors. Which likely complications their relationship. See - »www.amazonkdp.com/ up to 70% of sales can go to the author when using Kindle Direct Publishing, anyone with an Amazon account can publish. That has to concern many traditional publishers.
Congress could mess up a one piece jigsaw puzzle.


but as an author one is inherently limiting one's market is one limits oneself to ebook only....

Rowling is a classic example of an author far better off with traditional publishing - because she made so much from full price hardback sales to people queuing up desperate to buy the books on minute 1 they are available

the "up to 70% royalty" is, of course, a marketing claim....

what they offer is either a 35% royalty on your price (list at $9.99 and you make $3.49 a copy - even if amazon sell it for less than $9.99)
a 70% royalty on the actual price in certain countries net of the delivery costs {and in the EU less Luxembourg's 3% VAT}
and 35% elsewhere

Delivery Costs are equal to the number of megabytes we determine your Digital Book file contains, multiplied by the Delivery Cost rate listed below.

Amazon.com: US $0.15/MB
India on Amazon.com: INR 7/MB
Amazon CA: CAD $0.15/MB
Brazil: BRL R$0.30/MB
Amazon.co.uk: UK £0.10/MB
Amazon.de: €0,12/MB
Amazon.fr: €0,12/MB
Amazon.es: €0,12/MB
Amazon.it: €0,12/MB
Amazon.co.jp: JPY1/MB for files less than 10MB, no charge for files equal to or over 10MB
Amazon.com.mx: MXN $1/MB
Amazon.com.au: AUD $0.15/MB

We will round file sizes up to the nearest kilobyte. The minimum Delivery Cost for a Digital Book will be US$0.01 for sales in US Dollars, INR1 for sales in Indian Rupees, CAD$0.01 for sales in CAD Dollars, £0.01 for sales in GB Pounds, ¥1 in JPY, R$0.01 for sales in Brazilian Reais, $1 MXN for sales in Mexican Pesos, AUD $0.01 for sales in Australian Dollars, and €0.01 for sales in Euros, regardless of file size. For sales in JPY, we will not deduct any Delivery Cost for books 10 MB or greater.

still have to pay the full delivery costs even if your ebook is discounted (royalty on the reduced price)

so which is better depends on the cost and size of the book (a short text only book with paltry cover art selling for a high price will be better on the 70% option, a long book with illustrations may be very different - amazon's quoted maximum size for KDP is 50MB (which would mean US "delivery costs" of $7.50 per copy!! - and a $9.99 list price, which is the maximum amazon allow the 70% option on would mean the author owing amazon money on every copy sold )

but they have certainly conceived of a limit of 650MB (and Amazon would deduct $97.50 a copy for "delivering" a file that would comfortably fit on a single CD-R)

As the publisher, you set the "list price" for your content. We reserve the right to set the retail price we charge for the books you provide to us. We may offer your book at a price below your list price if, for example, the price at which a competitor sells your book, or the price at which we sell a physical edition of your book is lower than your list price. In that case, if you chose the 70% royalty option, your royalties will be calculated off of this offer price for sales that qualify for the 70% royalty option. If you chose the 35% royalty option, you will be paid off of the original list price you chose.

i.e. amazon could, if they wish, choose to offer your ebook at a price that merely equalled the delivery cost, you won't get a cent in royalty on the 70% option, could become the poorest bestselling author in history

to be eligible for the optional 70% royalty terms, one needs to
a) still be in copyright
b) be available in all countries you have rights in
c) meet a far stricter range of list prices (minimum $2.99, max $9.99 in the US etc. - you can sell for much more on the 35% option)

and This list price must be at least 20% below the lowest physical list price for the physical book

{so to be able to set the $9.99 kindle list price (which amazon can discount/undercut and trash your income on) one cannot sell a physical book at less than $12.49......}

·Google Voice
·Future Nine Corp..
Ebooks at Amazon are 20% of books sold. See »www.forbes.com/sites/jeffbercovi···numbers/

Rowling sold Harry Potter for a 1,500 pound advance after being rejected by many publishing houses. - »www.scotsman.com/lifestyle/books···1-652114

Selling Harry Potter for $1 a book, would have resulted in Rowling making significantly more money in a few days than she made during her first years.

It would have propelled her into hardcover books, on her terms.

Amazon says the Kindle is edition of Harry Potter is 1329 KB delivery anywhere in the world would cost 2 to 3 cents.

Rowling at $1 dollar a book, or 1 pound a book would have paid 2 to 3 cents to distribute it via Kindle, and kept 70% of sales.

She'd only have to have sold 2,000-3,000 Kindle books to make the advance she got on her first book. She'd have covered that and a lot more within days.

Same for many authors.

Hachette and other major publishers limit choices, by limiting authors, and limit choice by keeping prices high.

On the Amazon store, Harry potter used goes for as little as 1 cent, which is zero to Rowling. The Ebook price is still $9.99. Used books don't generate cash to authors or publishers.

I wonder if Rowling gets 70% of the Harry Potter sales from Amazon? Somehow I suspect Hachette gets more.

If I were an unknown author, seeking to start out today, I'd self publish at Amazon.
Congress could mess up a one piece jigsaw puzzle.


hmm - you are completely misunderstanding the way publishing works - an "advance" is just that - she (or rather her literary agent*) didn't "sell" harry potter for a £1500 advance - she was given a £2500 advance against her future royalties on the UK sales of Harry Potter and the Philosopher's Stone by Bloomsbury (not Hachette - they only handle her "adult" books under the name of Robert Galbraith**) - i.e. until the first £2500 of royalties were accrued, and she had "earned out" the advance, she got nothing further, but then she did - in spades.... the initial print run was 350 Hardbacks (and their lucky owners are sitting on big bucks, if they've looked after them.... ) and 150 bound "proof copies" to be given away to try and generate blurb quotes etc. - a fair number of the first edition (possibly as many as 300), in cunning marketing completely unavailable via Amazon, went to libraries*** (and of course Amazon won't find an artist for the cover etc. either, as Bloomsbury did and paid for) and then it was also simultaniously published as a "paperback original" with a larger print run (6k iiuc..... soon sold of course) and adult-friendly cover.

for the US rights her agent secured a $105k advance (again against future royalties) in April 1997 {at the Bologna Book Fair} from Scholastic, Inc. - note this is still almost 3 months before the UK edition was first published (on 26 June 1997) - and it was published in the US in October 1998 (a couple of months after book 2 in the UK - with a first print run of over 10k hardbacks...and too many paperbacks to be collectible) with an initial print run of 125k copies (as Harry Potter and The Sorcerer's Stone) at a cover price of $16.95 (later raised to $17.95)

note that she retained the digital rights and self-publishes them that way - but has to give Bloomsbury a cut (rather than the other way round..)

amazon reportedly had to make major concessions before she would allow a kindle edition - allegedly she gets 90% of her Kindle sales

anyway having established that the advances she recieved are not £1500, but £2500 + $105k (say $109k.....)

lets go on to your amazon figures:
a) she cannot sell at $1 and get the 70% deal..... (must sell at $2.99-9.99 in the US, £1.49-£7.41 in the UK etc)

if it is 1.329MB then she can sell it on the 35% royalty at $0.99-$200 (£0.75-£120 in the UK etc)

so at $1 a book she'd have got 35c a book and had to sell 311.4k copies just to equal her advances (for UK and US alone.... )

b) so let's assume a more realistic $2.99 price to enable her to use the 70% option...

distribution is 15c a MB so each copy costs not "2-3c" but 19.935c in the US (£0.1329 in the UK - where she must also account for VAT on the sales - ebooks bear VAT whereas printed ones don't in the UK)

and she makes $2.093 - 0.1935 = a whisker under $1.90 a copy...

and she still has to sell about 57.3k copies to equal her advances (and by taking the 70% option, she has greatly weakened the ability to sell the Canadian, Australian etc rights - because they are all available on cheapo ebook immediately... not staggered like the physical books.....

{and good luck selling that many without a publishing machine working to sell them - average income of a self published title is about £500 afaik. certainly possible though... see below }

she probably got about a 10% initial royalty on list price so her tiny first uk run would have got her, say, 6k copies*£0.799 = just under £4800 (not a lot, but more than enough to comfortably "earn out" the UK advance and of course new much bigger print runs were almost immediate - risky to print a big first run and potentially have to pulp them if it "bombs") if we are pessimistic and assume all the first hardback run are given away as promos. by the end of 1997 her UK sales were 70k copies (so her first UK royalty cheque would have been for over £40k, less her £2.5k advance) her first US run would have got her about $212k (about double the advance so again confortably "earning out".....) and by the end of 1998 her US sales were 190k (with the 7th printing being done) so her first 6 months US royalty cheque would have been for about $323k, less her 105k advance, and she would be eagerly anticipating a jump in royalty rate soon (most likely at 250k sales)

at that stage (before the higher royalty rates authors get as sales get higher under traditional contracts) she is, you will note, making a similar sum per copy on the kindle 70% rate at $2.99 as the conventional contract on a full price ... but:
1) doesn't get a publisher marketing her book out of their cut - with connections in the book trade & press for reviews etc. {book 1 came out in the UK with glowing puff on the cover} and capeable of getting prize judges to shortlist it {it won UK’s National Book Award and a gold medal in the Nestle Smarties Book Prize in 1997, a few months after publication.. and in the US Publisher’s Weekly’s Best Book of 1998 award.....}
2) can't generate word of mouth by getting physical copies in libraries/schools
3) has to source and fund cover art herself with her own money (Bloomsbury do it out of their cut)

so the thing is it is much harder to sell a lot of self-published ebooks than it would be with a publisher behind it - they have better marketing ability..... the problem is getting a publisher interested {even harder now than it used to be by all accounts.... unless you have a track record or are a "name"}

what publishing via kindledirect most definitely cannot do is "propel (future JKR) into hardcover books, on her terms" - she still has to get herself into hardcover books, and the terms she can get will be limited by the fact that Kindle versions are available at a price way below the price of a hardback, even a childrens hardback..... that's one thing if the ebooks come after the initial mania, but quite another if they are out there already.

there are quite a few bestselling ebooks that sell at $0.99 - but of course if you do that via Amazon you can't get "70%" and have to settle for just under 35c a copy

there are full price ebooks that sell by the million (50 shades... hunger games.. etc.) but that is on the back of higher still print sales (and marketing... and in the case of hunger games Hollywood)

the "game" for e-selfpublisher would be bestsellers is currently self publish, hope for massive word of mouth and then negotiate a deal with a "real" publisher as a "known" author - eg

140k ecopies sold in a month at 99c (she will have got little royalty of course...) but it got her a literary agent and a 7 figure advance - initial print run of 400k for that book's first "proper" edition. - but that was the route forced on her after trying the conventional route unsuccessfully {40 literary agents rejected her, to Rowlings 1; 14 publishers rejections before she gave up and self published. $1500 investment to get it edited and formatted.}

self publishing is a good back up plan (if you believe in the work) but the conventional route (literary agent to get a publishing deal) is the better one - it's rather telling that even an author with 360k copies of a single "ebook" sold still considered it worthwhile to get one rather than deal with publishers directly and avoid giving the agent a cut. let alone carry on epublishing.....

amazon.co.uk shows the following prices for Harry Potter and the Philosopher's Stone:
Paperback (kids cover)
£5.24 (discounted from a list price of £6.99)
{a Welsh language edition is the same price...}
"new" from £2.43+£2.80 delivery (i.e. just £0.01 cheaper than amazon itself)
£9.09 (discounted from a list price of £12.99) "new" from £6.05+£2.80 delivery (i.e. just £0.24 cheaper than amazon itself)

in both cases "used" is more expensive even before delivery

{there's also exotica like a "deckle edge" hardback edition cut to resemble a handmade book, with a "more adult" cover, at £10.17 (also £12.99 list price)
and an "adult cover" paperback at £4.47 (discounted from a list price of £7.99) ("new" from 1.38+2.80 shipping - "used" more expensive)

to get the kindle ebook in the UK you buy from Rowling herself (as "pottermore") for £4.99 (even if you do it through amazon - thus she can sell the kindle version for more than amazon discount the adult cover paperback to - whereas under the kindledirect terms the fact the adult pbk is available at £4.18 delivered would mean that to be eligible for the 70% terms she'd have to discount below £4.99)

going to amazon.com for "sorcerors stone" gets me:
$6.92 (list $10.99) "used" at $0.01 comes with $3.99 shipping, naturally.... $3.95 used with free delivery is the cheapest potential copy {fairly low ratings for these though - not the 98+% positive one would really hope for} and all "new" are considerably more expensive than amazon, albiet still cheaper than $10.99
$16.04 ($24.99 list!! - clearly the UK is kinder to the hardback reader..... ) "used" at 1c+3.99 shipping for copies in admitted poor condition with no dustcovers etc. "new" at $10.97+3.99 shipping = a $1.08 saving over amazon's hardcover price.

Kindle edition, again through Pottermore.com even if you buy through amazon, is $8.28 (not 9.99 - i presume that was just an assumption by you) so once again by not being through kindledirect she is able to sell her ebook at a price higher than amazon would allow given the price of the cheapest new print copies of the title

knowing Rowling's politics, my guess is she regarded Amazon as "tax-evading scum" even before she was caught up in this dispute... under her new sideline only.....

*the first one she offered it to turned it down, the second, Christopher Little, accepted it and spent a year hawking it round publishers to secure the Bloomsbury deal to publish the whole series

** which was hawked around under that name concealing her identity, rejected by at least one publisher, published and sold bugger all with mixed reviews - then it was "revealed" who "Robert Galbraith" was and immediately became bestseller....

*** for which an author gets income when they are lent in the UK - up to a modest ceiling... nothing jo Rowling will notice now, but not insignificant for some authors if they are poor

·Google Voice
·Future Nine Corp..
Lets read what a Hachette author says about Amazon, Hachette and payments.

From - »www.digitalbookworld.com/2014/an···-battle/

Of course many people wisely point out that Amazon may apply similar pressure to self-published titles, and I have no illusions about the long term prospect of a 70% royalty. But even if Amazon cuts the self-publishing royalty rate in half, they would still be paying twice as much as I get under the current Hachette contract where ebook royalties are split 30% to Amazon, 52.5% to the publisher, and 17.5% to the author.

What do I think should happen? Well first off, publishers have to realize that getting $3 for every $1 that an author makes on ebooks just isn't fair. Ironically, they are feeling the same pressure from Amazon that they apply to authors%u2014requesting a higher share because they hold a strategic advantage. I'm sure both Amazon and authors look at the publisher's 52.5% and can't help but think more should come their way, but unlike Amazon authors are powerless. The big-five publishers are remarkably uniform in paying 25% of net on ebooks, so the author has to either accept that rate or go the route of self-publishing. If I could set the terms, I would suggest 30% to Amazon, 35% to the publishers, and 35% to the author.

Mr. Sullivan is a very successful author, I see 29 of his books listed at Amazon many very well selling - »www.amazon.com/Michael-J.-Sulliv···t_book_1

He can daily read his sales of Amazon ebooks, but Hachette only provides him a twice a year statement of sales -

So how has this affected me as a Hachette author? Well, it's difficult to know precisely as we only get royalty reports twice a year, and the royalties for January through June won't arrive until October 2014. But Nielsen's Bookscan system captures about 65% %u2013 75% of the point-of-purchase print sales, including those bought at most bricks-and-mortar stores and the big online retailers like Amazon and BandN.com. From this data I've seen my print book sales drop to 54.8% of what they were before this all started. There could be many reasons for this, but I'm concerned the higher price of my books, and the lack of their availability, has led many fantasy readers to opt for a book from other authors that were cheaper and easier to get. It also seems to indicate a good portion of my particular readership buys print books from Amazon, as listings at other sites remained unchanged.

Impact to ebook sales (due to lack of discounting) is harder to judge, because I only have Amazon sales rankings to go by. In early February my sales ranks were running 5,000 %u2013 8,000, nowadays I'm seeing 10,000 %u2013 23,000. I don't know exactly how many lost sales that equates to, but I do know my books are further down on the various best sellers lists and higher rankings mean I'm selling fewer books.

So where does this leave me? Well first off, it has me questioning the publishing path for my next series, The First Empire, which I just finished writing.

So there ya go, a successful author, with 29 published books, some are bestsellers, can get 17.5% of ebook sales from Hachette. If he self published his ebooks, he'd get 70%.

So yes, tell me why it makes no sense for authors to self publish, and tell me why Hachette shouldn't worry. The last sentence above, he is questioning the publishing path for his next book.

Do you really think Rowling, as a new author, or any new author can get the rate Mr. Sullivan can, or that Rowling does today?

Hachette is selling at least 10,000 of his ebooks for $10 a piece, and paying Sullivan $17,500 while taking $50,000.

That $50,000 would be the authors if he self published.

Are you certain traditional publishers aren't concerned about losing control of authors? If you read the article, the author isn't informed of sales often by Hachette, and makes a very small percentage of sales. Hachette is using a business model from 1948, it may be time to advance to the 21st century.
Congress could mess up a one piece jigsaw puzzle.


said by pandora :
Mr. Sullivan is a very successful author, I see 29 of his books listed at Amazon many very well selling -
He can daily read his sales of Amazon ebooks, but Hachette only provides him a twice a year statement of sales -
So there ya go, a successful author, with 29 published books, some are bestsellers, can get 17.5% of ebook sales from Hachette. If he self published his ebooks, he'd get 70%.
hmm - so much to cover and so little time..... (and space).
Sullivan has a contract with Orbit (part of Hachette) for 6 of his originally self published "books" only struck in 2010 - they are 3 Orbit titles each of which is 2 of the 6 book series as self-published:

Theft of Swords collects The Crown Conspiracy and Avempartha, ISBN 978-0-316-18774-9 (2011)
Rise of Empire collects Nyphron Rising and The Emerald Storm, ISBN 978-0-316-18770-1 (2011)
Heir of Novron collects Wintertide and Percepliquis, ISBN 978-0-316-18771-8 (2012)

Theft of Swords was selected as one of Barnes & Noble's 2011 Best Fantasy Books, shortlisted for the 2013 Audie Award for Fantasy,and also one of Library Journal's 2011 Best SF/Fantasy Books {my guess is very much that he owes these awards, and commensurate sales boosts, to Orbit's marketing...}

he had self published as:
The Crown Conspiracy (2008)
Avempartha (2009)
Nyphron Rising (2009)
The Emerald Storm (2010)
Wintertide (2010)
{and the 6th didn't made it to self publishing until after the orbit deal, but is still available selfpublished on amazon}

{"Theft of Swords" is 704 pages long, so perhaps the individual books as self-published were a bit short by fantasy series standards? or maybe they just work better as as story arc across 2 books? i haven't read them so can't comment with any authority}

and 2 more (prequels to the series) published in 2013
The Riyria Chronicles
The Crown Tower (2013)
The Rose and the Thorn (2013)

they turned down his later books - again he went with a (different) conventional publisher

said by Michael J. Sullivan :
Self-publishing in the early years wasn't very profitable, but as the number of titles I released grew (along with the popularity of ereaders), things got better. By the time the four book came out I was selling a respectable 1,000 copies a month and with the release of book #5 the first month's sales jumped to over 2,500. With just one book left in the series, Robin wondered if it made sense to try New York again.

By this time, I had a foreign rights agent who had negotiated a number of overseas translations. She agreed to represent the title for English rights and Robin and I figured it would take six-months to a year before anything would come of it...and more likely than not, nothing would. Teri submitted to seventeen publishers and within a week had interest from about half of them. Orbit (fantasy imprint of big-six Hachette Book Group) made a pre-emptive six-figure offer with an accelerated release schedule. We agreed.

Now this is where the story gets really surreal. The time is November 2010, no one knows about the Orbit deal (it wasn't made public) but I, like many moderately successful self-published author saw a remarkable increase in sales. I was suddenly selling 10,000 - 12,000 books a month and earning $45,000 - $55,000 for each of those months.

In March, we announced the Orbit deal, which unfortunately would delay the release of the last book. In August and September my self-published books were removed from the market, to make way for the Orbit editions. They took the six-book series and re-published it as three, two-book omnibus editions. The books came out in back-to-back months from November 2011 to January 2012.

he doesn't have 29 books (that's the number of hits including out of print self publishing, anthologies he is in and:
he has the 5(8) with Orbit

the one published by Tachyon on a print rights only deal
Hollow World (2014)

and a free audiobook of a short story.....

for Tachyon (where he is self publishing the ebook:
the Paperback is $12.93 (on a list of $15.95)
the kindle version is $3! (and comes free with the paperback - for which transactions he gets zero royalty but does pay "delivery costs" )
I had already been successfully self-published in the past, and I was more than willing to do that again in order to get this book in front of readers. As it turned out, I got a nice five-figure offer for the book...but (the devil isn't in the details, it's in the buts) that publisher wanted full rights: print, ebook, and audio. I REALLY wanted to keep the ebook rights so I turned that down and went in search of a "print-only" deal.

For those that don't know, there have only been a few "print-only" deals...and all of them by authors who sell at blockbuster levels (Hugh Howey, Brandon Sanderson, Bella Andre, and Coleen Hoover). But I figured nothing ventured nothing gained, so my agent approached Tachyon Publishing (who did Brandon Sanderson's print-only deal for his Hugo winning The Emperor's Soul) and they made me an offer which I gladly accepted. I then sold the audio rights to Recorded Books, which have done such a great job with my Riyria Revelations and Riyria Chronicle novels.

One of the big advantages about retaining ownership of the ebook is that I can do some things that other publishers can't...namely:

I can offer free ebooks for anyone who buys the print or audio versions version
Provide my books DRM free so that they can be read them from multiple sources
Provide all ebook formats so readers can read it on their kindle, ipad, or nook
Offer a non-explicit language version for those who are sensitive to swearing

I'm really excited by this new publishing paradigm. My hope is that it will be good for the readers, Tachyon Publications, Recorded Books, and myself. A win-win-win-win-win if ever there was one.


for the Orion books, on Amazon:
each of the 2 Ryria Chronicles books are $16 for the paperback, $8.28 for the Kindle edition
Theft of Swords is $16 for the paperback, $9.94 for the Kindle edition
Rise of Empire and Heir of Novron are $17 paperback and $10.77 Kindle
{in all cases no discount to list... as part of Amazon's campaign against Hachette }

said by pandora :
So yes, tell me why it makes no sense for authors to self publish, and tell me why Hachette shouldn't worry. The last sentence above, he is questioning the publishing path for his next book.
well firstly, and most obviously, here we have, yet again, an author who was (reluctantly) self publishing and consciously chose to seek out a "real" publisher rather than continue to do so....

Hachette turned down his later work already (one imagines his contract with them is likely to give them options on anything "Ryria" related he may choose to write, however.... )

he has been able to find a publisher who is willing to take him on a physical book only deal (and since he has rewarded them by massively undercutting them with his self-published ebooks i doubt he'll find that as easy to do again.... )

of course he'd rather get more of the sales of his Orion ebooks - who wouldn't.....but since they profit from the same marketing etc as his print books from Orion why should he? (if he had a print only deal with them you can bet his printed book royalty rate would be lower than it is on his "full rights deal" - he'd be denying them an important income stream but they still have to do the same marketing.... and if his Tachyon deal is anything to go by they could look forward to him massively undercutting them with ultra low price kindle sales

any author who actually reads a daily summary of his sales (something he has zero oportunity to influence) is exhibiting a rather severe case of writers block methinks..... Amazon pay kindledirect authors monthly, 60 days after the end of the month, so looking monthly to see what is coming your way 60 days later is about as frequently as it's worth checking unless you have altogether too much time on your hands
{conventional publishing royaties are 6 monthly, 3 months in arrears, so there is a substantial cash flow advantage to kindledirect.... which is offset by the advance a publisher will pay that kindledirect don't of course}

his royalties on a kindle sale are not that different (because the orion titles are more sensibly priced c/w the print copies) - assuming that kindle sizes scale with length, Hollow world is 384 pages to "Sorcerors stone"'s 320 so we can assume "delivery costs" in the US of 24c

that gives him $2.10-0.24=$1.86 per kindledirect sale of Hollow World
whereas kindle sales of the Orion books get him:
Rise of Empire and Heir of Novron $1.8845
Theft of Swords $1.74
The Crown Tower and The Rose and the Thorn $1.45

{of course with Hollow World one imagines a far higher proportion buy the ebook since it is under a quarter of the price of even a discounted print copy ....... he is happilly f***ing over Tachyon - i hope they didn't give him an unrealkistic advance that he has decided he'll never earn out so why bother trying..... }

the key part of his post i wouyld take issue with is this one:
publishers have to realize that getting $3 for every $1 that an author makes on ebooks just isn’t fair.
it is fair because the publisher has to bear all the marketing costs and that should be spread fairly over all formats not disproportionately on printed books (especially with authors who want to undercut their print sales in favor of ebook sales they make more money on, as sullivan clearly does with his non-Orion book)

what he is spot on with, and which makes all use of the "70%" useless for analysis, is this:
I have no illusions about the long term prospect of a 70% royalty. But even if Amazon cuts the self-publishing royalty rate in half, they would still be paying twice as much as I get under the current Hachette contract
note a conventional publishing contract sets out royalty rates that are then fixed in stone. whereas publish on kindledirect and:
said by Kindledirect publishing terms and conditions :
The Program will change over time and the terms of this Agreement will need to change over time as well. We reserve the right to change the terms of this Agreement at any time in our sole discretion. We will give you notice of the changes by posting new terms in place of the old at »kdp.amazon.com/ and »kdp.amazon.co.jp/ with a revision date indicated at the top or by sending an email to the email address then registered for your Program account. Here are the rules for when changes will be effective and binding on you:

2.1 Changes to Agreement Terms Other than Those in Sections 5.4.1 (Royalties) and 5.5 (Grant of Rights). Changes to terms of this Agreement other than those contained in Section 5.4.1 (Royalties) and 5.5 (Grant of Rights) will be effective on the date we post them, unless we otherwise provide at the time we post the changes. You are responsible for checking for updates and your continued use of the Program after we post changes will constitute your acceptance of the changes. If you do not agree to the changes, you must withdraw your Digital Books from further distribution through the Program and terminate your use of the Program.

2.2 Changes to the Terms of Sections 5.4.1 (Royalties) and 5.5 (Grant of Rights). Changes to terms of this Agreement contained in Sections 5.4.1 (Royalties) and 5.5 (Grant of Rights) will be effective and binding on you on the date 30 days from posting or on the date you accept the changes, whichever first occurs. You accept the changes by either (a) clicking agree or accept where you're given the option to do so or (b) by using the Program to make additional Digital Books available through the Program. Changes to the terms of Sections 5.4.1 and 5.5 will only apply prospectively with respect to Digital Books sold after the date thirty days from our posting of the changes, unless you accept the changes as provided above. If you do not accept the changes, you must withdraw your Digital Books from further distribution through the Program and terminate your use of the Program prior to the date thirty days from our posting of the changes. Note that we may make acceptance of changes a condition to continued use of the Program.

3 Term and Termination

The term of this Agreement will begin upon your acceptance of it and will continue until it is terminated by us or by you. We are entitled to terminate this Agreement and your access to your Program account at any time. We will notify you upon termination. You are entitled to terminate at any time by providing us notice of termination, in which event we will cease selling your Digital Books within 5 business days from the date you provide us notice of termination. We may also suspend your Program account at any time with or without notice to you, for any reason in our discretion. Following termination or suspension, we may fulfill any customer orders for your Digital Books pending as of the date of termination or suspension, and we may continue to maintain digital copies of your Digital Books in order to provide continuing access to or re-downloads of your Digital Books or otherwise support customers who have purchased a Digital Book prior to termination or suspension.
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5.4.7 Offsets, etc. We can withhold Royalties and offset them against future payments as indicated below. Our exercise of these rights does not limit other rights we may have to withhold or offset Royalties or exercise other remedies.

• If we pay you a Royalty on a sale and later issue a refund, return, or credit for that sale, we may offset the amount of the Royalty previously paid for the sale against future Royalties, or require you to remit that amount to us.
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Upon termination of this Agreement, we may withhold all Royalties due for a period of three months from the date they would otherwise be payable in order to ensure our ability to off-set any refunds or other offsets we are entitled to take against the Royalties.
• If we terminate this Agreement because you have breached your representations and warranties or our Content Guidelines, you forfeit all Royalties not yet paid to you. If after we have terminated your account you open a new account without our express permission, we will not owe you any Royalties through the new account.

so if you don't like a future royalty cut amazon want, your only option is to leave the scheme .... and if you leave the scheme, they get to hang onto all outstanding money for an extra 3 months {so better hope you have some savings to tide you over 3 months with zero income whilst you're panicking to find another way to sell your ebooks }