Hachette vs. Amazon Dispute is a Lose-Lose for Authors
As I scroll through Google News articles about the now infamous Hachette-Amazon dispute, I see several impassioned headlines that urge authors and readers to pick a side in the brawl, as if allegiance is somehow a reflection of one's moral fiber. "Amazon is Not the 'Putin of Books,'" and "Amazon is Not Your Best Friend," are two such examples.
If you read the comments of any of these articles, you will likely stumble across several that voice a troubling sentiment among authors who aren't supporting either side. Those comments remind me, and I'm about to reveal my inner nerd here, of a line from Tolkein's Lord of the Rings, spoken by a giant tree creature (an Ent named Treebeard, to be precise) who tells his hobbit companions, "I am not altogether on anybody's side, because nobody is altogether on my side." In this comparison, authors are Treebeard and his fellow Ents. In the midst of the war raging between Amazon and Hachette (Sauron and Middle Earth, you might say), they are largely ignored. No one is fighting for them.
The crux of the entire dispute, as Mike Shatzkin explains on his blog, is over who gets the biggest share of profits on ebook sales. The agency model, says Shatzkin, established the 30% profit share that retailers like Amazon and Barnes & Noble enjoy. Publishers retain the other 70%. Amazon now wants a bigger share from Hachette, which will hurt both publishers and authors in the long run.
"I thought a couple of years ago that perhaps it was unwise for publishers to keep so much margin rather than giving it to authors because it made them a fatter target," wrote Shatzkin back in May when the dispute surfaced. Essentially, publishers have been taking a bigger cut of profits from ebooks than they have in print due to agency pricing. Literary agent Brian DeFiore pointed this out back in 2013 after HarperCollins released slides to its investors explaining why ebooks were so profitable for them. DeFiore wrote, "A $27.99 hardcover generates $5.67 profit to publisher and $4.20 royalty to author. A $14.99 agency priced ebook generates $7.87 profit to publisher and $2.62 royalty to author." Interestingly enough, DeFiore pointed out that if authors made a $4.20 royalty on the ebook, publishers would still take an improved profit of $6.28.
Whether or not publishers' fatter ebook profits are the cause of their current Amazon woes is still up for debate. What isn't is that authors have a great deal to lose from this exchange. Not only are Hachette authors suffering from lost royalties from buried titles on Amazon, but their royalties may dwindle even further should Amazon win its battle with Hachette. In the theoretical future where Hachette forks over a greater share of profits to Amazon, the publisher will be faced with a decision of where to cut costs to make up the difference. If that decision leads to lower royalty rates for authors, the industry is in trouble.
And so is Hachette. If it is forced to give Amazon a bigger slice of the ebook pie, and decides to stint on author royalties, the publisher risks losing some of its author talent. In search of a better royalty deal, authors may turn to publishers who take a more author-centric approach, but I think a significant number will decide to self-publish. As Amazon continues to erode publishers' power in the market, self-publishing becomes increasingly attractive and it leads authors right to, that's right, Amazon.
AT BEA last month Jason Allen Ashlock spoke from the literary agent's perspective on the danger of Amazon taking control of book retail and book publishing. "When the industry begins to circle around a single player then the author gets moved out of the center of the system and gets pushed to the outside along with publishers," said Ashlock, "This limits authors to the role of service providers. They are just generating the content that supports the larger mechanism."
What Ashlock argued is that authors should sit at the center of the publishing process, not Amazon. The content creator should be the entity whose needs are met by the service providers (publishers and retailers) not the other way around. "If publishers really link arms and keep the author in the center of the publishing model," said Ashlock, "Then Amazon just becomes another option, another partner, which is a much healthier way to view them."
For those who want a strong publishing industry-one filled with greater options for publishers, authors, and readers-it is time to champion the author's side in a much bigger way.