Have I fallen through the rabbit hole?

In my room hangs a poster that has to be close to 30 years old, if not older. It shows a group of gentlemen in Victorian dress, hats in hands, looking down the railroad tracks to the bridge that has failed and the steam engine has gone off the bridge into the river below. The caption is very simple: “Oh, shit!”. That’s exactly the image I see right now when I look at the responses from those who are having such a hard time understanding why the Department of Justice has filed suit against Amazon and the five publishers (Hachette, Harper-Collins, Macmillan, Penguin and Simon & Schuster). These folks are reacting in this manner for different reasons, but they are rallying around the status quo and crying “foul” without really considering the allegations against the parties or the reasons for them.

Apple has come out and denied the allegations. No surprise. The corporation has the deep pockets necessary to tie the Department of Justice up in litigation for years. But antitrust allegations and problems with the DoJ are nothing new to Apple. Their lawyers are smart enough to wait to settle until they see exactly what the government has in way of evidence. Of course, they do have to worry about the video of Steve Jobs talking about the price of e-books. Does Jobs explicitly say he and the named publishers in the suit have made this super secret agreement to take down Amazon? No. But, when taken in context with other evidence the DoJ possibly has, it is something a jury could use to infer guilt. Remember, circumstantial evidence is still evidence. A pattern of behavior can also help demonstrate guilt. Am I saying this is what happened or will happen, no. I’m saying it is something that should be taken into consideration.

But what has really had me wondering if I fell asleep and woke up in an alternate world has been the cry of some writers that even if Apple and the Publishing 5 did collude to fix prices, we shouldn’t be going after them. Scott Turow posted this on the Authors Guild site: By allowing Amazon to resume selling most titles at a loss, the Department of Justice will basically prevent traditional bookstores from trying to enter the e-book market, at the same time it drives trade out of those stores and into the proprietary world of the Kindle.

First of all, this isn’t necessarily what the DoJ is after. In fact, if you read the court documents, you will see that the DoJ specifically says it isn’t alleging that agency pricing is a bad thing. No, the alleged collusion between the parties to set prices is what the DoJ is going after. All this is is the knee-jerk reaction of someone who should know better. But isn’t it much moredramatic to say the DoJ is acting like it is working for the big bad Amazon’s best interest than to say it is simply trying to enforce the antitrust laws passed by Congress?

Another part of that comment that drives me up a wall is how Turow goes back to how this will prevent “traditional bookstores from trying to enter the e-book market”. Wait a minute, what traditional bookstores is he talking about? Borders? They’re gone. Barnes & Noble?  They are already in the e-book market and have their own branded e-book reader line. Of course, they are behind the eight ball because they failed to recognize the importance of the market and enter it as early as they should have. Local indie bookstores? Oh, wait, B&N and the other big box bookstores (most of whom are no longer in existence) put the majority of the indie stores out of business. Where was the hue and cry when that happened? And where is the cry of “foul” against Google for withdrawing their support of indie stores regarding e-books. Oh, wait, I guess because none of those entities are named Amazon, it’s all right.

Apple had this to say about the allegations: The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.

First all, Amazon didn’t have a “monopolistic grip on the publishing industry”. Smoke and mirrors. If you say it long enough and loud enough, people may start to believe it. As for benefiting from e-books that are more “interactive and engaging”, that has nothing to do with the iBookstore. That has to do with the platform the e-books are designed for. These interactive or “enhanced” e-books were designed for the iPad. The iBookstore is simply the venue where they can be purchased. Also, these so-called enhanced e-books are a very small, minute even, percentage of the titles coming out that to use them as a justification for what happened is ridiculous.

Apple goes on to say, “Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.” Oh yeah, one minor thing the spokesman left out — this is with the understanding that those same publishers can’t offer their goods for a lower price anywhere else. Again, not necessarily illegal. But there is still that nasty little allegation that Apple and the  Publishing 5 colluded to use the agency model to drive up prices.

I can’t find it right now — my laptop with most of my research on it died before I could back the research up — but there are several posts by authors and publishing insiders who admit that Apple and the Publishing 5 may have colluded in such a way as to violate the antitrust laws. But, they say, it was for the common good. After all, all they were trying to do was protect the little guy by breaking the stranglehold Amazon has on publishing. And, well, if Amazon doesn’t have it now, it will. Sure it will. And it’s evil. Would they lie to us? Besides, they continue, why is DoJ going after them when it should be going after Amazon?

Look, I can’t tell you how all of this will work out. All I can say is that three of the publishers named in the suit have agreed to a settlement that will include cancelling the agency contract with Apple. the agency contracts with Amazon and the other sellers will become moot. For a period of two years, things may go back to how they were before the agency model or there may be a hybrid model of sorts. But it doesn’t necessarily mean the agency model is dead for all extents and purposes. As I said Saturday, only time will tell.

I’m also not saying Amazon is pure as the driven snow. It is a business. It is out to make money. The only true loyalty it has is to its shareholders. However, as a writer, I will say it has opened up the field to those of us who couldn’t get past the gatekeepers before. Sure, some of us didn’t have the talent to do so. But others do. We just didn’t hit the right person in the agency or at the publishing house at the right time or with the right material. As a reader, I love what Amazon has done because it has given me access to writers who don’t fit the mold of the latest craze artificially produced by a legacy publisher. I don’t care about sparkly vampires, much less derivative stories about them produced by other writers because that is what the bean counters in their offices overlooking Central Park say will sell.

A commenter to my Saturday post railed against Amazon’s KDP program requirement that they not sell their e-books for less anywhere else. After all, that’s the same thing that Apple and the Publishing 5 were in trouble for. I had a couple of problems with that statement. First, because it overlooked the fact that that isn’t what the DoJ said in its filings. It was the alleged collusion that would be in violation of the law, not the agency agreement itself. My second issue with the comment was that it overlooked the fact that this is the same agreement indies have to “sign” with Barnes & Noble’s PubIt program, with Apple if you publish through them, etc. But the only outlet this commenter pointed to was Amazon.

There are others out there who decry Amazon because to go into the KDP Select Program that lets you actually put your titles up for free for a period of five days in any 90 period, you have to remove your titles from other sales outlets. How dare Amazon do that? Sorry, but it is a voluntary program so you don’t have to do it. Also, to the best of my knowledge, you can’t take your titles for free — or at least not easily — anywhere else (Smashwords is the exception but that opens a whole new can of worms about getting it off being free through the retailers it distributes to if you are in the expanded catalog). But the fact that Amazon gives an author or small press a viable promotion tool makes it evil and it is taking advantage of us poor dumb writers and editors.

Then there are those spreading disinformation about how “[f]rom a publishing perspective, the ebook platforms are too fragmented, ebook creation and design is too complicated, expensive, and limited, and sales are too dominated by a single platform that has a history of being aggressive towards its suppliers.” First of all, which publishing perspective? What platforms? Is he talking e-book formats or sales outlets? E-book design, and creation is anything but complicated and expensive. There is a learning curve, but in all honesty, it is easier to layout an e-book than it is a print book. As for e-book creation and design being too limited, that is changing — has changed — with the rising popularity of tablets. The only problem there is that most e-book readers still prefer reading on their dedicated e-book readers because there are too many distractions on a tablet. Yes, there are those legacy publishers worried about Amazon (who else could he be talking about?), but I, for one, have no problem realizing that Amazon was the first to recognize the importance of e-books as a retailer and to act. I guess, by the line of thought in this “publishing perspective”, we should now go in and penalize Amazon, even if it isn’t in violation of any laws, for being forward thinking. Wouldn’t that set a great example? As for being aggressive towards its suppliers, duh. It is called business. It is called negotiation. No one yells “foul” when a publisher decides not to sell through Amazon. No, the fault is Amazon for wanting terms the publisher isn’t willing to give. Yes, I am now rolling my eyes.

Look, the agency model of publishing isn’t dead. It may be dying. But none of us will know for sure until the antitrust case has run its course through the courts, if it goes that far. Then there is the two year period of the settlement agreement to see what happens. In the meantime, there are other issues in the publishing industry that have to be addressed. Issues such as the creative accounting that has gone on for years. Using figures that are nothing more than fiction when determining whether or not to pay royalties to a writer. Sorry, I don’t give a damn what bookscan says, or what a publisher says in its report, but when an author has books on the shelves of a major bookstore more than two years after the book came out — and I’m not talking the clearance table — that book has been selling and selling well. Otherwise, they wouldn’t still be stocking it. So why does the publisher claim there weren’t sales? In this day and age of computer technology and RFIDs, there is no reason for a publisher not to know exactly how many copies of a book were printed, how many copies went where and how many were returned. But, for that to be implemented, they’d have to change their model and they aren’t going to do that.

Instead, they’d rather stand at the edge of the publishing bridge watching their train steam along the track, not seeing that the track has collapsed due to age and failure to use the latest technology not only to maintain but to expand and race out to meet the future. Publishing might not be dead, but it is ailing and continuing to cling to out-of-date practices and beliefs isn’t going to help save it.

Edited to add: Welcome to everyone coming here from Instapundit. Thanks for dropping by and many thanks to Glenn Reynolds for linking to us.

31 comments

    1. I saw that and that was when I really started wondering if these guys even live on the same planet I do. I know most businesses on my planet would be wondering what their CEO was smoking if he came to them with this really great idea: “I know, we’ll take a cut in profits to insure there will be more competition!” First of all, what company wants to make LESS money. For another, most companies don’t want competition, not really. But, in this case, the only competition they might have wanted was competition for the big, bad, evil amazon. And, sure he made that decision all on his own while lonely and on his exercise bike. All those alleged conversations didn’t take place and those emails are all faked.

    2. These are all creative ways to put their fingers in their ears and yell la la la la la. They REALLY remind me of aristocrats unable to understand a revolution has taken place.

  1. Eh, previous reply didn’t seem to make it.
    Point blank, Hoyt’s on it. When I talk to agents and people in the agency world, I can’t believe we live in the same cosmos. These are the people who brag about how MUCH they can sell their product for, and expect consumers to hear such boasts and declaim “wow, you really care for me!”

    1. Sorry, your comments were in the pending queue and I just saw them.

      I have to wonder about the same thing when I hear it. Somehow, my cable company, my phone company, etc., aren’t getting thank you notes from me when they raise my rates. Neither did I sent notes of appreciation to publishers when the price of e-books went up. But then, I’m beginning to believe those folks live in an alternate universe that just happens to co-exist at times in our space.

  2. re: I can’t find it right now — my laptop with most of my research on it died before I could back the research up — take the drive and put it in a SATA/IDE to USB 2.0 Drive Adapter. Plug it into system and maybe you can get to the drive. Often it is not the drive that is dead.

    1. Rich, that’s exactly what I plan to do. I just haven’t had the time today to do so. In fact, the way this week is lining up, it will probably be the weekend before I can. But thanks for the tip!

  3. You haven’t fallen through the rabbit hole. They have. And while publishing is not dead – yet – it will be. Probably very soon. Even the best case scenario isn’t one they can survive (I’ll be elaborating on this in my post Thursday).

    1. Kate, having talked to you about your post and the reasoning behind it, you are probably right. But — and I’m trying very hard not to get into politics here — I can see them trying to get a “helping hand”. That seems to be in their mentality. If the “we broke the law to battle a great evil” defense doesn’t work, what are they going to pull out their hats next?

      1. I’m not worried about what they pull out of their hats. It’s what they pull out of the other end that concerns me.

          1. I guess I have an advantage here, having been raised on this kind of imagery while eating dinner (no, I’m not joking. EVERY dinner ended up with either toilet humor or serious discussion about matters excretory)

  4. Baen Books seems to be doing a good job with the whole eBook thing, without DRM. I’ve been buying eBooks from them since 1998 and they have only raised prices once. I literally have bought more than 1,000 eBooks from them. Scope it out.
    http://www.baenebooks.com/default.aspx

    1. I’ve been buying from them just about as long. Most of us on MGC are either Baen fans or Baen authors. We were infected by Jim Baen and believe not only that e-books are here to stay but also that our customers — our readers — aren’t inherently dishonest. But the other thing Baen has proven is that it isn’t expensive to create e-books. If it were, how could they continue to sell them after more than 10 years for less than $7.00?

  5. To paraphrase Mark Twain, “Imagine I were an idiot. Now imagine I were a traditional publishing exec …”

    Just a few meandering thoughts here, from some guy with precisely zero business experience but considerable experience buying things and reading books …

    Don’t all of the publishing houses have websites of their own? If they’re so incredibly worried about Amazon’s effects on the sales of their products, then why are they selling via Amazon instead of selling/shipping directly from thoeir own electronic storefronts? And most of those stridently anti-Amazon NYC-published authors out there screaming vitriol on Sarah’s and other blogs also clearly have web-access they could use to sell directly, right?

    Charlie Stross’ clarification of his earlier failure to grasp the essentials of this in today’s post boggled my mind. He spends a considerable number of column-inches explainkng that Amazon built their whole business model on disintermediation … then bemoans their current intermediate position, without the slightest glimmer of comprehension as to how the consumers and suppliers might react if they ever did become the evil mutant he is certain they will become any day now.

    Or am I just too simple-minded to grasp the intricacies and nuances of the issue?

    1. Not at all, Steve. But the problem with your reasoning is that it would require the hidebound in their ivory towers in publishing land to change their way of thinking. Many of them still believe in their dark little hearts that e-books are something that will soon go away. They don’t want to change their business plans because those plans used to work. They won’t recognize the truth that those plans have been leading to failure for years. Worse, they think they still control the market like they used to. When they do deign to glance out their windows and look down on us lowly folk, they get scared and that only causes them to dig in even deeper.

      Naked Reader Press has its own web-based store. It sales, usually, more of our titles than B&N on a monthly basis. But that is only a drop in the bucket when compared to our Amazon sales. How many of those sales from Amazon are for kindles and how many are being converted for use on other e-book readers, I don’t know. Frankly, I don’t care because they are sales. That’s why we don’t apply DRM to our titles. So, whether they would need to form a co-op with some of the other publishers to drive more customers to their store or what, it is something that could be doable. But, as I said, it would mean a change from norm and that does seem to be something they just don’t want to do.

      1. Boss, I think you do yourself a grave disservice with that comparison. NRP has done amazing things in fifteen months, but the inescapable reality is that you don’t — yet — have the same sort of market penetration and name-recognition the Legacy Six have. NRP would unquestionably have a much rougher time trying to do business without Amazon.

        The same is not true of, say, TOR or ACE. Suppose they announced tomorrow that they were discontinuing all deals with third-party e-tailers, and restricting their products to brick&mortar, their compny website, and their various authors’ sites. Their fans would still be there, and they wouldstill be able to find and buy the books. Amazon almost certainly helps them move books, but is by no means essential to them. If Amazon does suddenly undergo the Banner-to-Hulk mutation that all the reactionaries are so scared of, something very much like that would almost certainly be the result.

  6. I for one welcome my new publishing overlords at Amazon. The ability to actually publish a book I wrote without kissing a Pub Houses ass and also the chance to read a gazzilion titles at a fraction of the dead tree version( first edition prices that is). It just doesnt get any better than that for a reader/writer. So I make a tad less on ebooks.Guess I have to write more new words,like any manufacturer. Amazon lets the market actually price the value of all the word buckets ( ebooks) by sales alone. Good for them ,God I love capitalsm.

    1. Rich K, I agree with you. Am I keeping a close eye on Amazon? You bet. But, until I actually see them trying to screw me or I find something better, I’m more than willing to operate within their framework.

      As for making less on your e-books, not really. Not when you consider that you get up to 70% of the price of the book as compared to maybe 15 – 20% of the net (which can have some very imaginative definitions) you’d be getting from the legacy publishers. For an e-book priced at $2.99, you get approximately $2. For a $4.99 title, you get approximately $3.45. If you were selling through a legacy publisher and your e-book was priced at $7.99, at 20% you’d get less than $1.50. Check out some of Dave Freer’s posts here on MGC. He’s done some really good ones breaking down the figures paid by legacy publishers v. small presses or self-publishing.

    2. I agree. I’m a “casual author” who wrote a novel for the fun of it while doing other things. It’s out there now (obviously a masterpiece, please buy fifty), making almost no sales b/c I don’t care about marketing it.

      Guess what? So are a ton of other 99-cent novels out there, many of which I’ve purchased. Some are horrible. But so are a lot of things that sat on slush piles. The point? Well, basically every single thing I’ve published above (except mentioning slush piles) has nothing to do with publishers whatsoever. Publishers like to talk as if they’re PRODUCING the stories. They don’t. They’re nothing but middlemen, and obsolete middle-men at that.

    1. Sorry, not a clue. I bought it at least 25 years ago. It has gone from high school to college, post-grad, and on.

    2. Me too – I have spent years trying to track it down. I have a copy but would like a pristine one. I believe I bought it from Athena near Leicester Square and I think it is nearer 40 years ago than 30. If anyone knows how to source another or where to find the original, please let me know.

Comments are closed.