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Thread: Amazon's letter to all publishers - also of interest to anyone who reads books

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    Moderator Kay is a Premium Member
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    Amazon's letter to all publishers - also of interest to anyone who reads books

    Miaow! You probably know about the Amazon v Hachette dispute. (We've discussed it in the Premium Lounge.)

    Today Amazon sent a letter (via email) to all KDP publishers. You could say they're just stating their case. OTOH, you might think it's propaganda. Either way, it makes for an interesting read. They've also published the letter here:
    http://www.readersunited.com/

    Basically, their argument is that low book prices are good for all. They make books accessible to everyone, which encourages people to read more. Plus they're good for authors because lower prices result in more book sales and that means more money for authors. They're very persuasive in making their points.

    I would love to be able to believe what they say. If they were a 'nicer' company, with even a hint of altruism or care for their 'associates', it would be easier to believe them. However, they are the stingiest, most self-interested merchant I've ever been affiliated with. Sorry, I find it hard to believe that anything they say is for any reason other than their own profit maximisation.

    Read their letter (link above) and see what you make of it.
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    Publishing Mentor dsieg58 is a Premium Member
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    Interesting. Two huge corporations are battling. It's hard to feel sorry for either one. Hachette is playing purely an emotional and PR game. Amazon seems to have facts and logic on its side. It's also hard to argue with lower book prices. Since Amazon doesn't even have a contract with Hachette (which Hachette willingly let expire) they are under no obligation to stock ANY of their books. The fact that Amazon continues to sell their books is pretty big of them. Indie authors don't get "pre-order" buttons either, so boo hoo to the authors that are missing them. I also see a lot of misinformation in the media put out by Hachette via their big name authors, i.e. Douglas Preston. Overall, I think Amazon has done more good for authors and literature in the last 5 years than Hachette has done in the last 100 years. I also think Amazon has negotiated in good faith and Hachette hasn't. I know I certainly don't want to go back to the closed and gated publishing system that existed before Amazon tore the wall down. It's an exciting time to be an author, for sure.

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    ...some thoughts on Amazon versus Hachette. First: No, I didn't discuss this in the Premium Lounge - why would this debate be hidden? I have discussed some of this elsewhere, as I had no idea this conversation was even occurring on EP.

    Quote Originally Posted by ReadersUnited
    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.
    Specious reasoning. Misdirection worthy of a master illusionist. I see Amazon's assertion that there is a fixed number of dollars for a subject, and a lower price results in more readers, as flawed. That is absurd. Demographics proves group size does not increase to compensate lower pricing.

    I would suggest Amazon knows better than they are letting on, as they cannot be this inept for business analytics. Books have a cost in producing the content. Each subject has a finite audience. Price must justify the effort applied or authors will use other avenues to enable publishing such as seminars, subscription sites, sales pages. Cost of content production has a cost, therefore a value. The value may substantially exceed 19.99. I have consumed information worth $1000 and higher.

    Quote Originally Posted by dsieg58
    Overall, I think Amazon has done more good for authors and literature in the last 5 years than Hachette has done in the last 100 years. I also think Amazon has negotiated in good faith and Hachette hasn't. I know I certainly don't want to go back to the closed and gated publishing system that existed before Amazon tore the wall down.
    What Amazon has done in the past several years is fill its virtual shelves with ebook spam, junk electronic tomes of zero worth that make wading through a subject laborious and surreal. I now must look for publisher names and search based on known quality publishers. Real book publishers care about reputation of their authors and their company - Amazon could care less, it's their version of a rummage sale. Quantity over quality brings traffic for their other product lines.

    Amazon tore the wall down? Bull. The internet tore the wall down. Amazon is one of thousands of book retailers on the web. It is the biggest and is trying to use its size to force a proprietary format. The barrier Amazon removed was to book quality, vetted author competence, subject expertise, filling their virtual shelves with inane, ignorant, incompetent ebook spam.

    Quote Originally Posted by Kay
    I find it hard to believe that anything they say is for any reason other than their own profit maximisation.
    You got it - That is exactly what everybody in business does. That's the goal. Profits. There is nothing wrong with that. Name any business with no interest in profit maximization, and I'll show you a business destined for failure with indigent and soon-to-be-destitute owners.

    Amazon would not be bothered with nor by Hachette were it not for the authors they represent. What happens when Amazon doesn't get the next JK Rowling book that is published? People that look nowhere else but Amazon must now find it elsewhere? How would that play into any reasonable and respectable goal of global retail dominance?

    I've seen the results of lowering barriers to book publishing through Amazon and the lower prices on ebooks. For me, it is now far more difficult to find useful information on subjects of interest. It's a massive flood of spam and ecrap where quality is no longer vetted. ...but don't make the mistake of thinking this is only about books.

  4. #4
    Moderator Kay is a Premium Member
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    Quote Originally Posted by KenW3
    ...some thoughts on Amazon versus Hachette. First: No, I didn't discuss this in the Premium Lounge - why would this debate be hidden? I have discussed some of this elsewhere, as I had no idea this conversation was even occurring on EP.
    It's obvious you wouldn't have been involved in the discussion in the Premium Lounge, given that you're not a Premium Member.

    Some of us prefer to discuss things within our own community rather than posting for all the world and drive-by visitors to see. There's no obligation on any Premium Member to discuss things in public. Several of the members prefer the smaller, more private group, especially when their concerns, questions, or discussions aren't intended for public consumption. You're welcome not to participate but there's no need to appear as though you're surprised that the Premium Members don't discuss everything on the public forums. The private forums are at least as busy as the public ones. Just like in the old days with Clinton's VIP Lounge, members tend to keep the best stuff for their own private place.

    Specious reasoning. Misdirection worthy of a master illusionist. I see Amazon's assertion that there is a fixed number of dollars for a subject, and a lower price results in more readers, as flawed. That is absurd. Demographics proves group size does not increase to compensate lower pricing.
    I agree that their reasoning is flawed. However they could be right about price elasticity and that lower prices lead to increased volume. I guess an author can only discover how this affects sales of their own books by testing. (And that would be quite tedious because Amazon gives publishers very little information to work with.)

    I would suggest Amazon knows better than they are letting on, as they cannot be this inept for business analytics.
    Oh, yes. They know what they're doing, which is why I thought that their letter was more propaganda than fact.

    Books have a cost in producing the content. Each subject has a finite audience. Price must justify the effort applied or authors will use other avenues to enable publishing such as seminars, subscription sites, sales pages. Cost of content production has a cost, therefore a value. The value may substantially exceed 19.99. I have consumed information worth $1000 and higher.
    I completely agree. In fact I'm facing this myself. I'm reluctant to sell my new book (which I finished last month) on Amazon, because if I charge more than $9.99 for it I'll only earn royalties of 35% rather than 70%. I'm looking into various possibilities of publishing without Amazon's 'help'.

    What Amazon has done in the past several years is fill its virtual shelves with ebook spam, junk electronic tomes of zero worth that make wading through a subject laborious and surreal. I now must look for publisher names and search based on known quality publishers. Real book publishers care about reputation of their authors and their company - Amazon could care less, it's their version of a rummage sale. Quantity over quality brings traffic for their other product lines.
    Agreed. There's more crap on Kindle than on a Parisian pavement (sidewalk?). But how can they fix that problem? Put some gatekeepers in place just like traditional publishers? It's easy to describe the problem but tougher to come up with solutions.

    You got it - That is exactly what everybody in business does. That's the goal. Profits. There is nothing wrong with that. Name any business with no interest in profit maximization, and I'll show you a business destined for failure with indigent and soon-to-be-destitute owners.
    You've either misunderstood my point or have chosen to interpret it according to what you want to say. Of course a business wants profits. Why are people in business? To make profits. That said, you can maximise profits in the short term by alienating a lot of people. It's worth considering that a longer term view might be to keep your customers and suppliers happy. Don't forget that if people didn't write books, they wouldn't have books to sell. Therefore, the authors are their suppliers - and they sure as heck have alienated plenty of their authors. Additionally many of the 'associates' (ie affiliates) aren't happy with them either. Nor their staff. Are their customers happy? I don't know. Mostly, I'm happy enough as a customer but I don't like the company so show me the same deal elsewhere and I'd be off pronto. In other words I have no customer loyalty whatsoever to Amazon.

    I've seen the results of lowering barriers to book publishing through Amazon and the lower prices on ebooks. For me, it is now far more difficult to find useful information on subjects of interest. It's a massive flood of spam and ecrap where quality is no longer vetted. ...but don't make the mistake of thinking this is only about books.
    I totally agree. I was looking at some Kindle books today and it was quite rare to see any which were even 50 pages long. All kinds of rubbish is being sold as though they're books. I love your use of the word "ecrap". Wonderful! That goes straight into my vocabulary. Did you make it up or see it elsewhere? (I've never seen the word before.)
    British Expat - helping people to live and work abroad since the year 2000.

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    Top Contributor crabfoot is a Premium Member
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    Back about 17 years Amazon was an online bookseller which went into receivership. Someone in the organisation realised the online platform was their way forward and the company was transmogrified into what we see today.

    Traditionally, books have always been expensive, reflecting the production costs needed to absorb the risks of trying to sell unproven products. But those costs have dropped in the modern age with the advance of technology.


    Accordingly, the risks of publishing are also reduced. So Amazon's reaction to lower risk publishing has been to give ANYTHING a chance to succeed. which is why there is so much ecrap in their stock.


    They are not thick as two short planks, those Amazon people. Weeding out the ecrap will start soon. Meantime, the opportunity to get in on the ground floor is still open.

    And Amazon is back to where it was aiming from the start ...

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    Moderator Kay is a Premium Member
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    Quote Originally Posted by crabfoot
    Weeding out the ecrap will start soon.
    Why do you say that? Have you any evidence? I'm sure this would be welcomed by readers and writers who write high quality books but I've not yet seen anything which suggests that this is about to happen.

    I used to review a lot of books and leave one star (the lowest possible) ratings on some in the hope of deterring the authors of ecrap but it probably had as much effect as banging my head against a brick wall, so I rarely bother now.
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    Top Contributor crabfoot is a Premium Member
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    Quote Originally Posted by Kay View Post
    Why do you say that? Have you any evidence? I'm sure this would be welcomed by readers and writers who write high quality books but I've not yet seen anything which suggests that this is about to happen..
    Evidence? My lips are sealed - but common sense says it has to happen.


    Quote Originally Posted by Kay View Post
    I used to review a lot of books and leave one star (the lowest possible) ratings on some in the hope of deterring the authors of ecrap but it probably had as much effect as banging my head against a brick wall, so I rarely bother now.

    It has more effect these days than it did in the past. But not bothering is probably as effective.

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    Moderator Kay is a Premium Member
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    Quote Originally Posted by crabfoot
    Evidence? My lips are sealed - but common sense says it has to happen.
    Well, I don't have any inside information so perhaps you're right. Our definition of "common sense" differs, because my common sense tells me that as long as people are buying ecrap then Amazon will continue to sell it. Why would they reduce their profits by excluding large numbers of publishers? Also, introducing quality control would cost them plenty in terms of implementing and policing it - and increased costs would also mean lower profits for them. They're leaving quality control to those who review books, ie their customers. This is obviously a very flawed way of doing it when there are so many shill reviews (and revenge ratings).

    I would be among the first to be glad if they introduced some means of quality control but as far as I can see it's only wishful thinking at this stage. I'd love to be wrong so I hope your source turns out to be correct. I'll be very pleased if in a few months time you post again to say, "I told you so".
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    Publishing Mentor dsieg58 is a Premium Member
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    Amazon is extremely pro free market. My guess is they will do nothing and let the market decide what is good and what is bad. Cream rises to the top, people buy authors they like. The market, left alone, polices itself. This philosophy which they have practiced since the beginning, has made them a lot of money and is the cheapest solution for them. Even in taboo subjects, they have shown very little inclination to start censoring (Which is exactly what you are talking about) material. A couple of years ago someone published a book on how to molest children and amazon was reluctant to pull it down because it open themselves up to violating free speech. The writer himself did after public pressure. Regarding the Hachette issue. Hachette will lose. Simply because they have no valid legal argument. Which is why the are waging a PR war, instead of a legal one. Catchy phases and celebrity endorsements won't help them in legal negotiations, or a court of law. Amazon is under no obligation to sell their, or anyone else's books. Amazon doesn't owe Hachette, or any author or business a profitable year. Hachette owes itself one. Nor have they ever promised one. The facts are, Amazn doesn't have a contract with them, Hachette intentionally put their authors on the fire line to drum up public support and put pressure on Amazon, Hachette wants artificially high eBook prices, and Hachette was caught colluding with the other big 5 publishers to keep eBooks high and create a cartel. They were caught and censored for it. this is public record and fact. Lastly, people don't buy "publishers" they buy authors. No one goes into a book store or Amazon and asks for/searches for "Hachette books" they search for "Lee Childs" or Stephen King, not the publisher. Hachette is on the wrong side of history and should have learned a lesson from the music and movies businesses, who had the same struggle with digital content and lost. The fact they are unwilling to change with the times only means they are hurrying their own demise.
    Last edited by dsieg58; 10 August 2014 at 7:20 pm.

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    Quote Originally Posted by ReadersUnited.com
    there is no secondary market e-books cannot be resold as used books.
    More misdirection. Considering Amazon has filed for a patent on resale of ebooks, Apple was granted a patent on resale of digital goods long ago, and ReDigi.com is already engaged in the process of reselling digital music with other egoods to come, nobody is being fooled here.

    Authors United published Jeff Bezos' email address (at Amazon) to ask for help in this dispute, so Amazon turns around and published the Hachette CEO's email address? This affects neither company and plays into establishment of factions. Whose purpose does this serve?

    Quote Originally Posted by crabfoot
    They are not thick as two short planks, those Amazon people. Weeding out the ecrap will start soon.
    I couldn't guess just how soon, but will wholly concur with anyone suggesting inevitable. When Amazon has so cluttered their book section with low quality publications that buyers are forced elsewhere to assess quality, search algorithms and content rejection must be employed to free itself from low quality prattle. I said this to a colleague after seeing the first products on how to get rich by gaming Amazon's publishing system.

    How many times has this happened with MMO schemes? Let's take a poll, please raise your hand if you think Amazon would be so foolish as to embrace an MMO get rich methodology to add short-term profits by allowing low-quality products at the expense of their reputation. What business does that? Any suggestion that Amazon will not be proactive in protection of their reputation is ludicrous.

    Quote Originally Posted by Kay
    You've either misunderstood my point or have chosen to interpret it according to what you want to say. <clip>
    That said, you can maximise profits in the short term by alienating a lot of people. It's worth considering that a longer term view might be to keep your customers and suppliers happy.
    Is your longer term view suggesting diametrically opposed objectives? My suppliers are happy if I pay them more money than I think I should. My customers are happy when I charge them less money than they prefer to pay. I should think refusal to agonize over this disparity would lead to retention of sanity - and greater profits

    You can't please everyone

    Bezos started his company by selling products at a loss, with one of the highest burn rates and longest periods of capital drawdown of any internet startup. Amazon is playing a much deeper and longer game than many care to comprehend. Temporary (or even permanent) Alienation is not an adverse intent when structured to yield a desired result.

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