Industry Analysis

Amazon v Hachette: An Indie Perspective

Amazon or Hachette

Let’s be honest for a few minutes. There are two types of self-published authors(SPAs). In the first group are those who enjoy the spirit of “going it on their own.” Authors who want to write and publish and who place little value on the affirmations of a “publisher.” In other words, these writers don’t need a contract and small check to “make them feel” like a real author. The second type of SPA is the writer who self-publishes but hopes and sometimes tries to get a “real” contract. These writers simply will never feel they are “real” until someone in the Big or Small Press world affirms them.

I belong in the first group. Maybe because I know that a “contract” for a few hundred or few thousand dollar advance will not change my world. With one I’m no more likely to find my book in a bookstore and there won’t be any large marketing promotion on my behalf. I’m not willing to trade the satisfaction of doing it all myself, for giving over control for a few dollars and very bad contract terms. I don’t think poorly of the other group, as there is nothing wrong with affirmations and everyone travels his or her own path. I also understand that many large and small press published authors look down upon the Indie group. And for that reason, some SPAs want to join their ranks in hopes of feeling equal in some way.

Which brings me to my  point—the Amazon/Hachette War.

Many Indie authors have thrown their support behind the traditional authors who have been caught in the mix. Perhaps it is really heart-felt concern or perhaps it is an opportunity to gain some affirmations by being a part of a battle that has little, if nothing, to do with Self Published Authors (SPAs). Joining either side makes no sense to me. SPAs are, in general, not treated equally by either camp.

Now I don’t mind being charitable, but I’m smart enough to realize that once either side gets its “win,” they will expect SPAs to go back to the silent little corner they’ve placed us in. So lets lay out the real issues in this fight and consider them from the SPA perspective.

The SPA Market: The Big 5 would never have created a platform for independent authors. There is no upside to sharing the market space. The only reason we even speak of SPAs is because of Amazon. They created the market and they have done a pretty good job of providing several free and low cost tools for achieving publishing dreams. Most of the ebooks are sold through them and their success has created alternatives like Smashwords, who treats SPAs even better than Amazon. In those terms, throwing a vote to Hachette is like ensuring the lion gets a good night sleep before you fight it in the morning.

Authors for Hachette: Sure there are a number of best-selling authors who hate Amazon’s attempt to lower e-book prices. And as an author, one might believe it is best to side with them. But, here’s the truth—best-selling authors get very, very large advances. Most of them never collect a royalty on actual sales. Why? Because the sales of their books never reach a point that outpaces all the money they were advanced. So where does all that money come from? From all the other signed authors who receive very small checks, no marketing, and bad contract terms.

The new authors in these publishing houses actually need sales to make a living and they would do better if their book prices were lower…just like SPAs do. So a vote for Hachette certainly ensures the best-selling authors continue to get million dollar advances, but it does little for anyone else.

Treatment: The Traditional Publishers pick the winners and losers. Most SPAs went down this path because they didn’t want to write the two or three story lines Agents and Publishers would accept. And it is only recently that the Big 5 has even considered an SPA for a potential contract. Before they began the practice of combing through Amazon’s Best-Seller list, they spurned anyone who self-published…we were tainted goods. And really how has that changed? Sure they give contracts to previously SPAs—But only after that author’s book has already proved itself…on Amazon.

Of course Amazon has some of its own questionable treatment issues. For example, the recent Kindle Unlimited service pays higher royalties to traditionally published authors than self-published authors (which is why I won’t opt in). Also they are offering Hachette authors, 100% royalties on their ebooks, but not me. And we all know that you have far fewer options if you don’t go exclusive with Kindle (which is why you should have your eBook available at Smashwords.)

Still, in terms of the treatment of SPAs, Amazon wins.

Pricing Games: Price is both an advantage and a disadvantage for SPAs. The advantage is we can use pricing to entice readers to “try” us out. With limited book-buying budgets, a low price is in our favor. The down side is, price continues to be a negative connotation for SPAs. Readers can tell you are an SPA just by the price of your ebook. So if Amazon took control of the price discounts, that bit of separation would disappear. Good and Bad for us.

On the one hand that could be helpful. On the other, it could mean your $2.99 book was marked down to ninety-nine cents. But lets face it, Amazon can pretty much set the rules for Indie Authors and we will mostly play ball. And to their credit, they have not been abusive to SPAs to this point.

Small Press Concerns: The battle has implications for the small press industry. They need price control in order to make enough money to operate. Many authors feel that Small Press Publications are the best solution and best middle road to book publishing. I place this group in the same category I place the alleged Indie Bookstores. They have their own goals and one of them is to be the next Hachette. Business is competitive. I need money to continue to “operate” also and I am self-funded. While I think highly of small press business owners, they too are my competition and the best thing that can happen to the competition…is for it to fail. If they want my vote in a matter, well they can certainly offer me a fair contract. Besides…some of their authors…are really intolerable.

Why Does Anyone Really Care What SPA’s Think?

SPAs in the total book market, according to the Bowker analysis, only represent about 1% of the sales and in the subcategory of ebooks about 8%. So in this ebook war, we, as a group, are 8% of a 20% market share of sales. Best-selling, traditionally published authors account for over 90% of the ebook sales dollars. In those terms, SPAs don’t mean a lot.

Our numbers, however are a much different story. We are a huge voice in any public relations battle. SPAs accounted for over 40% of the new ISBNs issued last year. We put out hundreds of thousands of titles and if not for marketing and communication budgets, the average reader would be more likely to find an SPA than a traditionally published book.

If Indie Authors founded one membership group, and collected  dues from all Indie authors in the amount of just $20 a year, that group would have more money and more power than any of the Traditional Publishers in operation. Unfortunately, many of the existing Author Groups today are not focused on the Indie Author. They are focused on Small Press activity and promoting their own service agendas. (They include Indies and run pay to join contests to make money)

Still, the massive voice Indie authors could represent is the reason that your vote and opinion is being solicited.

In my opinion Amazon is the better ally… for today.

Who Needs Who?

Hachette can claim they are looking out for the best interest of their authors, but I’m a little leery of a company that violates Anti-Trust laws in an attempt to make profits and control a market. Also, I am doubtful they are looking out for my best interest, or those of the new authors they sign.

Amazon may be a dangerous beast looking for world domination, but they have also created more opportunities for authors and other small business owners than any one else. If the day comes that they get “too” big, a new competitor will arise to provide the consumer with better options.

Scorecard

But here are the really big truths of this issue:

Does Amazon want to control the pricing and distribution? Yes they do.

Do Traditional Publishers want to control the pricing and distribution? Yes they do.

Does Amazon pay higher royalties than Publishers? Yes they do.

Does Amazon pick and choose the book titles available to the public? No they don’t.

Do Traditional Publishers pick and choose the book titles available to the public? Well they did…until Amazon arrived.

On a final note, Hachette doesn’t have to make their titles available on Amazon, the same way I don’t have to opt in the Kindle Select or Kindle Unlimited—so if Amazon is that important to them, if Amazon is so successful that Hachette has to negotiate…well maybe the Traditional Publishers can learn something from the once “garage-based” business that changed consumer shopping habits and launched the possibility for an author to be self-published.

It seems in my humble opinion that Amazon knows what they are doing when it comes to running a business.

6 replies »

  1. Nicely put. I always felt that the opinion of any SPA went largely ignored, but you’re right. We do have a voice, we do have the numbers, and if we were better organized, we would be heard.
    Excellent article! It really gives us all something to think about.

  2. Saw this go through my Twitter feed. Great article. Nice information, too. I like that you include something I have mentioned. Nobody has to publish with Amazon, it is a choice. As a selfer, I am part of that first group you mentioned. It’s hard work, but I wouldn’t do it any other way. I love it. And I owe Amazon a huge thank you, just like Smashwords, and the others who allow us to get our books out there.

  3. I belong to the first “group” too, Raymond, and Amazon has been a pretty good friend. However, I’m still brooding over the letter they’ve sent me, not sure that I can support them as they wish. I don’t want to pay the same or more for an e book than for a hardback – but at the same time I don’t find their figures convincing.

    • I’m with you. I believe Indie/SPAs are (or should be) business professionals. We can form partnership and have preferred vendors…but it’s a business, so we should not join any “cheerleading” sections…stay aware and stay objective is my approach….and thanks for commenting!

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