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Posts tagged ‘Most Favored Nation’

More than one game in town.

Good morning, all. I hope everyone here in the States had a safe and wonderful Memorial Day Weekend. It has always been an important weekend in my family. There hasn’t been a generation, going back more than 250 years, when there hasn’t been at least one member in the military. On my mother’s side of the family, we can trace military service back to the Revolutionary War. Before then, too, but that’s another story. Many of those generations have seen family members wounded or killed in the service of our country. Add in the fact my son is now serving in the Air Force and, well, Memorial Day is very special to me. Which is why I broke one of my rules regarding social media last night and let loose on someone for daring to condemn the “flag waving” Americans do to commemorate the day. As a result, I didn’t get my post for today written ahead of time. So, apologies to you for being late but I do not apologize for my comments last night. Some of you know what I’m talking about. The rest of you, well, it’s now water under the bridge.

Which isn’t what you can say about the Amazon and Hatchette fight. I’m not going to rehash it. Cedar did a wonderful job discussing it on Saturday. However, I do want to add one thing on the topic, something all those bashing Amazon have conveniently overlooked. What is happening between Amazon and Hatchett is the first round of contract renegotiations between Amazon and the publishers involved in the price fixing suit brought by the Department of Justice. When the court ruled against Apple, it “issued a final injunction that requires Apple to retain the power to discount e-books for an extended period. The injunction also prevents Apple from simultaneously negotiating new no-discounting agency deals with the major houses, instead forcing the tech giant to negotiate with each publisher separately, in exclusive windows, staggered six months apart.”

As Publisher’s Weekly states, “if you were Amazon, would you sign a deal knowing that your competitor has the exclusive power to underprice you in the e-book market? At the very least, Amazon is sure to demand the same power to discount as its rival Apple is required to retain—even though Apple will likely not use its court-ordered discounting power.”

PW also points out that the settlements agreed to by the publishers, and enforced upon Apple in the findings against it, most favored nation clauses will not be allowed for five years. In other words, no agency pricing as we know it will be allowed during that time. So why, I ask, should Amazon fight for anything but the best terms it can get, especially if Apple has the right by court ruling to discount e-books? It doesn’t matter that Apple says it won’t discount these titles. Apple is a business and is known for being ruthless when it comes to its competitors. Why should Amazon trust it not to undercut its prices?

But there is something else authors with Hatchett, or any other traditional publisher, ought to keep in mind. A breakdown of earnings report has come out. You can follow the link to where Passive Guy discusses it or go here to see the original post. There is a lot of information there I need to go over when my brain is functioning better than it is right now — math is not my friend first thing in the morning — but one thing sticks out: approximately 46% of traditional publishing’s fiction dollars comes from e-books.

Let me repeat that. Approximately 46% of traditional publishing’s fiction dollars comes from e-books.

Now let me ask you this, traditionally published authors, how much of your royalty payments come from e-book sales?

Consider this. When it comes to royalties, traditional publishers still are not paying author’s a royalty rate that comes close to what they could earn if they self-published or went with small presses for their e-books. When pressed about this, publishers mumble about how expensive it is to make an e-book. They have to have covers and be edited and be set up for digital release and. . . .

But wait a minute. Do you really think those same publishers are actually editing, or copy editing or proofreading an e-book after it has already been edited, etc., for print? Do you really think they hire two different cover treatments? As for getting the book ready for digital release? That takes minutes now with the software available. So where is all the expense the publisher claims is there in making an e-book?

No, e-books are propping up the print side. Publishers just won’t tell you that. They mumble about how it is too hard to track e-book sales. Funny, I have about as much trouble believing that as I do the statement that in this day and age of computers and RFIDs and other tracking software and hardware that the only way they can come close to tracking hard copy sales is through the handwavium of BookScan.

What traditional publishing tends to forget — or at least refuses to admit — is that most people have no idea who publishes the books they read. The one real exception is Baen. But Baen is anything but typical when it comes to the publishing industry and thank goodness for that. So traditional publishing can’t rely on brand loyalty. These same publishers don’t understand that trotting out millionaire best sellers to extoll the evilness of Amazon, it doesn’t help their cause, especially not when those same millionaires are crying about how Amazon is hurting their bank account. If you want to get sympathy from the average reader, bring out the mid-lister. Oh, wait, the publishers can’t because 1) they make it so most mid-listers never earn out their advances and 2) they have metaphorically killed off most mid-listers. As a result, those who had a loyal following now have fans wondering what happened to the series they’d been reading and was suddenly dropped by the publisher.

So here’s what I’m going to do. I’m going to keep buying from Amazon. I’ll continue to sell my books on their sites as well. I’ll continue reading and researching what is going on in the industry so I can stay informed and make informed decisions about what to do regarding my writing and where to market it. And I’ll continue to shake my head and wonder at all those authors who aren’t out there asking their agents why they aren’t demanding higher e-book royalties and better contract terms. Traditional publishers, especially legacy publishers, have to accept the fact they aren’t the only game in town these days. If they don’t adapt, they will continue to bleed out money and lose authors and readers until they are mere shells of what they used to.

And that will be a loss to us all.

Or not.