more BS from Amazon

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: I HAVE REMOVED THIS EMAIL

Copy us at: readers-united@amazon.com

Please 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


MY FIRST RESPONSE

Dear Nathan:

If I am going to cc Amazon on an email to Michael Pietach, you will surely agree it is proper to cc Jeff Bezos directly.

Could you get me his functional Amazon address for that purpose?

And then send it to every KDP author as well? 

Or even just settle for sending us Russell Grandinetti's.

There are a lot of things you can do in a war.  Sending thousands of people the email address of a CEO of a major company shouldn't be one of them.

Every one of you should feel some measure of personal disgust to work for such a company.

This is not right.  You should be ashamed.  

Joshua Bilmes, President

JABberwocky Literary Agency, Inc.

(someone in the comments mentions that a jeff@amazon.com email address was given out, but it has been an open secret for years that this was Jeff Bezos' address once upon a very long time ago, but has long been staffed by customer service people.  It isn't his working email address, but rather the one you use to feel empowered when you complain.  The one Amazon gave out, to the best of my knowledge, is, and Hachette does not have a massive customer service staff like Amazon does.)

Loncon 3 Schedule

I'm looking forward to attending my second British Worldcon next week, and will be at London's Excel for Loncon 3.

Here's when you can see me:

Thursday 14 August, 13:00
Kaffeeklatsch, London Suite 5 (Level 0)

A Kaffeeklatsch is a small group around a table, and advance reservations need to be made with or at the convention.  I know it's early in the convention weekend, which doesn't give a lot of time to sign up.  I hope you'll make plans to be part of this small group.

Saturday 16 August, 12:00
Finding an Agent, Capital Suite 16 (Level 3)

Join me, author Jacey Bedford, fellow agents Ian Drury and John Jarrold, and moderator and long-time editor Betsy Mitchell.  This is an especially exciting panel for me to be on because of the great co-panelists.  Betsy gave me my start in publishing, and John Jarrold was one of the very first UK publishing folk I got to meet in person, during his days at the Earthlight imprint at Simon & Schuster.

Saturday 16 August, 13:30
Adult Readers Within the YA Market, Capital Suite 10 (Level 3)

Happily my back-to-back panels are not far from one another!  Authors Sarah Ash and Ben Jeapes and Tor UK editor Bella Pagan will be joining me for this panel.

----------------------

There are a lot of JABberwocky clients attending WorldCon and a lot of British publishers we don't get to see very often, so if you want to meet up with me, attending one of my panels is definitely the way to go. Not that you won't find me wandering around the dealer's room at some point or another, but with many people attending the con and events and meetings spread out in multiple hotels near Excel and even a few that'll have me hopping to Bank on the DLR, it'll be a little harder to count on serendipity bringing us together.

Dinner With Puppets

Somehow or other I never posted these two play reviews from several months ago...

Dinner With Friends, which first played in New York in the late 1990s into 2001, is one of the major plays by Daniel Margulies.  For a literary type such as myself, Collected Stories is perhaps the keynote. It's an All About Eve story of an aging writer and a young admirer/protege.  More recently, Time Stands Still, a play about a wartorn journalist recovering from wounds physical and spiritual at home got a lot of attention.

But it's Dinner With Friends that I saw today in a revival at the Roundabout's Laura Pels Theatre, and I can't say it impressed.

It's a yuppie marital drama.  A couple, probably in their thirties, are having a friend over for dinner.  She reveals that her husband is leaving her.  A few scenes that night of the aftershocks, one at her house, where he stops by when a flight cancellation keeps him from heading off to his new home.  They have sex.  Another as the couple that received the news discusses.

Act Two has a flashback to when everyone first met, when the one couple hooked her up with him.  Then his-and-her scenes as the two men and two women talk separately a while after the event, and then a final wrap-up scene in the bedroom of the couple that are still together.

And who cares?

These are the kinds of people who fly up to Martha's Vineyard to open their house for the summer, but who have no external lives that can be detected.  They each have kids.  The "happy" couple likes to talk about food, to decide that the shiraz is too astringent or maybe too much vanilla in the polenta cake.  They all spout platitudes about marriage and family life.

"Having kids is something I just have to do."

"I had to survive Tom in order to realize that my second husband is the man I was meant to be with."

"Why can you talk for hours and hours about the problems of everyone else we know, but the moment I want to talk about us you fall silent?"

And that's pretty much it.   The play never delves much deeper than those platitudes.  I "rested my eyes" purposely.  When there was a scene with brighter lighting, a read a little bit of a comic book, turning the pages quietly.  The best I can say is that I've seen plays that are plenty duller than this, but still, I just wasn't interested in a word of it.  I can't quite comprehend that this play was ever a "thing" in the drama world, that it won a Pulitzer Prize for Drama.

I saw Margulies' Collected Stories at the Lucille Lortel theatre, so many years back I think I was still working at the Scott Meredith agency.

Coincidentally, just a few hours after seeing Dinner With Friends, I found myself back at the Lucille Lortell, for Hand to God, which is certain to contend for my personal Best Play honors for 2014.

Written by Robert Askins and directed by Moritz Von Stuelpnagel, Hand to God is a play with puppets.

It starts with a marionette alone on screen delivering a monologue on theology.  Quite a funny one.  So whatever happens after this, at least there's one thing different.

Thereafter the play proper begins in the basement classroom of a small Texas church, where a recently widowed woman is seeking solace by teaching a puppet class for teens in the church, including her sullen son and a smoldering hot teen who has eyes on his teacher.  So, in fact, does the play's pastor.  We see two different types of seduction, one driven by the passion of youth and the other by the power of authority, within a few minutes.  For some plays, that might be enough.  For this play, the real fun begins when her son becomes possessed by his puppet.  Hard to tell what the puppet wants, exactly, but whatever it is the teacher's son will do what he can to gain satisfaction for his puppet.

This sounds serious, The Exorcist melded with Cat on a Hot Tin Roof, or something.  But it's a very witty play that surpasses any expectations for any of the individual genres you might want to tag it with because the underlying emotions of the characters feel true, and are realized on the stage by an excellent cast. The rave reviews are going especially to Steven Boyer as the son and evil puppet Tyrone.  Both are good.  But my eyes were drawn more to Geneva Carr as the mother and Michael Oberholtzer as the young man who desires her. She can pivot in a sentence or two, radiating vulnerability, confusion, strength, responsibility, passion, and he has "it," a lot of charisma and you see in his performance that way the young have of radiating what it is they don't know about life and don't realize they don't know.

I can often write the second act of a play having seen the first, because there are conventions that are followed in writing theatre, as in writing books or movies or pretty much anything else.  To its credit, Hand to God doesn't succumb to predicatability.  Ultimately, the end of the play doesn't go anywhere unexpected, but scene-by-scene it plays out with enough uncertainty that I could enjoy the second act rather than diagramming it,

I would expect a lot of local theatre companies in the US will be producing Hand to God in coming seasons, and you should keep an eye out for it.

Hugh Howey Is Right!

So, yes, the big publishers really do treat their authors shittily sometimes.

This example can be considered an extension of my post in March called The Royalty Jar, where I discussed reserves against returns as part of a series of posts on royalty statements.

As I mentioned in that post, we (a) try to review our royalty statements very carefully, including any itemization of the reserve against returns on the royalty statements (b) have contract language that puts some sort of limit on how much money a publisher can hold back in its reserve against returns.

Late last week, I was reviewing a royalty statement from a British publisher.

The contract language we negotiated for this deal says that the publisher can, at its discretion, take a reserve on paperback editions each semi-annual period of up to 25% of the author's royalty earnings for this edition.  Simple, right!  The language even suggests that the publisher could use its discretion to take a smaller reserve.  Not that I'd ever expect it, but it's a nice thought.

So for the second half of 2013, the paperback edition of this book earned £1200, 25% of that would be £300, and the reserve against returns on the royalty statement is -- £500 !!

Here's how the publisher accomplished this trick of turning 25% of £1200 into £500.

The previous royalty period was the first for this particular edition.  The book earned £3200, and of course, the publisher in that instance did the same math as any of the rest of us and took a £800 reserve.

This period, the publisher decided to add in the refund of the prior period reserve to the actual royalty earnings for this period.  Or, to put it another way, even though the author earned £3200 last time and £3200 was used as the basis for calculating the reserve against returns last time, 25% of that £3200 is now being "earned" again.  So what is supposed to be, contractually, a 25% reserve has now become a 41.67% reserve.

The publisher's gift to itself is a gift that keeps on giving.  Because...

The publisher has now taken an extra £200 reserve that it shouldn't, and it will refund that money to the author, and the author will "earn" that money a third time, and the publisher will take an extra £50 on the next reserve against returns.

The publisher still has the correct £300 reserve which it will refund next time, so that money will be "earned" a second time, and that will increase the reserve against returns by £75.

And the time after that, there will now be:
£50 the author will "earn" a fourth time, £12.50 of which will be "earned" a fifth time.
£75 the author will "earn" a third time, £18.75 of which will be "earned" a fourth time
and the correctly held 25% reserve for the first half of 2014, which will be incorrectly "earned" a second time.

Ultimately, when you carry out the math, the £3200 that the author earned on this paperback in the first half of 2013 will become a total "earning" of £4266 when determining the reserve against returns.

Bit by bit, drip by drip, the publisher will forever keep taking more than the 25% reserve against returns which they agreed to take in the contract.

Publishers do sometimes overpay authors, and they can lose millions of dollars on this book and thousands of dollars on that book, because they overpaid.  Then again, those choices are always the publisher's.  There's nothing right or fair about playing games like this with the reserve against returns for one author in order to compensate for bad decisions you might have made for some other author.

Especially when the shift to e-book sales over print sales means the whole rationale for having any reserve against returns is considerably reduced.  There is almost always money coming in from the e-book to make up for any overpayment of royalties due to returns of the print edition.

Now we shall present the publisher with this information...