Dear Hachette,
As
a reader, I'm surprised to see such a large company fighting the future
and, in so doing, denying itself maximum profits. Readers don't want to
pay exorbitant prices for digital property. It's one thing if you can
put a book on the shelf where it becomes a part of the decor, but quite
another when it's one of hundred or thousands of files on a hard drive.
Amazon is fighting for lower eBook prices, and that benefits everyone.
The research has been done. No matter what your profit margin, you will
make less money on an ebook that costs readers $9.99 or more than you
will on an ebook that costs readers $4.99 or less. Why? Volume. I have
never and will never purchase an ebook for more than $5.00.
I
am also a published author of 15 novels, several of them bestsellers.
I've sold over half a million books, and have eight more titles under
contract for the future. But I'm sick and tired of big publishing
companies squeezing authors as they do. I'm making a pittance on many of
my books while the publisher takes far more than the lion's share.
Finally, Amazon comes along and offers authors a fair royalty rate. I'm
thrilled. I can actually get paid like a professional now.
Authors certainly are NOT united against Amazon. In fact the majority of us celebrate what Amazon is trying to do for us.
Never alone.WayneThomasBatson
Bestselling Author of The Door Within Trilogy,
Isle of Swords, Isle of Fire, The Berinfell Prophecies, Sword in the Stars, and The Errant King, new Thriller GHOSTwww.enterthedoorwithin.blogspot.com
www.heedtheprophecies.com
www.swordinthestars.com
The preceding is a letter I wrote to Hachette book group based on the following email from Amazon.com. While I certainly do NOT support everything Amazon supports, I do support them in this fight. Legacy Publishing is simply in the wrong here.
Dear KDP Author,
Just ahead of World War II, there was a radical
invention that shook the foundations of book publishing. It was the
paperback book. This was a time when movie tickets cost 10 or 20 cents,
and books cost $2.50. The new paperback cost 25 cents – it was ten times
cheaper. Readers loved the paperback and millions of copies were sold
in just the first year.
With it being so inexpensive and with so
many more people able to afford to buy and read books, you would think
the literary establishment of the day would have celebrated the
invention of the paperback, yes? Nope. Instead, they dug in and circled
the wagons. They believed low cost paperbacks would destroy literary
culture and harm the industry (not to mention their own bank accounts).
Many bookstores refused to stock them, and the early paperback
publishers had to use unconventional methods of distribution – places
like newsstands and drugstores. The famous author George Orwell came out
publicly and said about the new paperback format, if “publishers had
any sense, they would combine against them and suppress them.” Yes,
George Orwell was suggesting collusion.
Well… history doesn’t repeat itself, but it does rhyme.
Fast
forward to today, and it’s the e-book’s turn to be opposed by the
literary establishment. Amazon and Hachette – a big US publisher and
part of a $10 billion media conglomerate – are in the middle of a
business dispute about e-books. We want lower e-book prices. Hachette
does not. Many e-books are being released at $14.99 and even $19.99.
That is unjustifiably high for an e-book. With an e-book, there’s no
printing, no over-printing, no need to forecast, no returns, no lost
sales due to out of stock, no warehousing costs, no transportation
costs, and there is no secondary market – e-books cannot be resold as
used books. E-books can and should be less expensive.
Perhaps
channeling Orwell’s decades old suggestion, Hachette has already been
caught illegally colluding with its competitors to raise e-book prices.
So far those parties have paid $166 million in penalties and
restitution. Colluding with its competitors to raise prices wasn’t only
illegal, it was also highly disrespectful to Hachette’s readers.
The
fact is many established incumbents in the industry have taken the
position that lower e-book prices will “devalue books” and hurt “Arts
and Letters.” They’re wrong. Just as paperbacks did not destroy book
culture despite being ten times cheaper, neither will e-books. On the
contrary, paperbacks ended up rejuvenating the book industry and making
it stronger. The same will happen with e-books.
Many inside the
echo-chamber of the industry often draw the box too small. They think
books only compete against books. But in reality, books compete against
mobile games, television, movies, Facebook, blogs, free news sites and
more. If we want a healthy reading culture, we have to work hard to be
sure books actually are competitive against these other media types, and
a big part of that is working hard to make books less expensive.
Moreover,
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.
But when a thing has been done a certain way for a long
time, resisting change can be a reflexive instinct, and the powerful
interests of the status quo are hard to move. It was never in George
Orwell’s interest to suppress paperback books – he was wrong about that.
And
despite what some would have you believe, authors are not united on
this issue. When the Authors Guild recently wrote on this, they titled
their post: “Amazon-Hachette Debate Yields Diverse Opinions Among
Authors” (the comments to this post are worth a read). A petition
started by another group of authors and aimed at Hachette, titled “Stop
Fighting Low Prices and Fair Wages,” garnered over 7,600 signatures.
And there are myriad articles and posts, by authors and readers alike,
supporting us in our effort to keep prices low and build a healthy
reading culture. Author David Gaughran’s recent interview is another
piece worth reading.
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.
We will never give up our fight for
reasonable e-book prices. We know making books more affordable is good
for book culture. We’d like your help. Please email Hachette and copy
us.
Hachette CEO, Michael Pietsch:
Michael.Pietsch@hbgusa.comCopy us at:
readers-united@amazon.comPlease consider including these points:
-
We have noted your illegal collusion. Please stop working so hard to
overcharge for ebooks. They can and should be less expensive.
- Lowering e-book prices will help – not hurt – the reading culture, just like paperbacks did.
- Stop using your authors as leverage and accept one of Amazon’s offers to take them out of the middle.
- Especially if you’re an author yourself: Remind them that authors are not united on this issue.
Thanks for your support.
The Amazon Books Team
P.S. You can also find this letter at www.readersunited.com
