- HachetteMichael Pietsch, HBG CEO
Stop fighting low prices and fair wages
Much is being said these days about changes in the book world, but not nearly enough is being said about the most important people in our industry.
You. The readers. Without you there wouldn’t be a book industry.
We owe you so much, and we are forever in your debt. Thank you for reading late into the night. Thank you for reading to your children. Thank you for missing that subway stop, for your word of mouth, your reviews, and your fan emails.
Thank you for seeking our books in so many ways—through brick and mortar stores, online, and in libraries. Thank you for enjoying these stories in all their forms—as digital books, paper books, and audiobooks.
We wanted this letter to be brief, but the topic is complicated. There is so much misinformation to correct, we wound up taking it point-by-point.
But for those readers with limited time, here is the crux of our message to you:
New York Publishing once controlled the book industry. They decided which stories you were allowed to read. They decided which authors were allowed to publish. They charged high prices while withholding less expensive formats. They paid authors as little as possible, usually between 2% and 12.5% of the list price of a book.
Amazon, in contrast, trusts you to decide what to read, and they strive to keep the price you pay low. They allow all writers to publish on their platform, and they pay authors between 35% and 70% of the list price of the book.
You probably aren’t aware of this, but the majority of your favorite authors can’t make a living off their book sales alone. Very few authors could when New York Publishing was in charge. That is changing now that Amazon and other online retailers are paying authors a fair wage.
You may have heard that Amazon and Hachette are having a dispute about how books are sold. The details are complex, but the gist is this: Amazon wants to keep e-book prices affordable, and Hachette wants to keep them artificially high. Higher than for the paper edition of the same story.
The rest of this letter explains more of the details. It explains why a boycott of Amazon would mean hurting authors, Hachette and otherwise. It explains how your decisions have granted more authors their independence than we’ve had at any other time in human history. You’re welcome to read our points, but keep this one key item in mind:
Major publishers like Hachette have a long history of treating authors and readers poorly. Amazon, on the other hand, has built its reputation on valuing authors and readers dearly. The two companies didn’t simultaneously change directions overnight.
As book lovers, you may have noticed a lot of the recent media coverage about this dispute. Some of it might be confusing. Exactly who is fighting whom? Why are Stephen Colbert and James Patterson so angry? Why is Douglas Preston drafting a letter to convince you that Amazon is evil? Why does Scott Turow condemn Amazon, and why does the Authors Guild fear the company that sells more books for its authors than anyone else?
The reason for this anger is simple: Many in publishing blame Amazon for the natural and inevitable transition to online book sales. This same transition has happened with other forms of entertainment. Rather than innovate and serve their customers, publishers have been resisting technology. They could have invented their own Internet bookstores, their own e-readers, their own self-publishing platforms. Instead, fearing the future, they fought to protect the status quo.
At this moment, one of the largest publishers in the world, Hachette, is battling Amazon for control over book prices. In this war, Hachette is using its authors as emotional ammunition. Hachette wants to control the price of its titles and keep those prices high, while Amazon wants to keep those prices reasonable. You may not realize this, but when Amazon discounts books, authors (and Hachette) still get paid the full amount. Discounted Amazon books do not hurt authors or publishers at all. In fact, discounted Amazon books help authors and publishers sell in higher volume while earning publishers and authors the same per-unit amount.
By what is being reported in the media, it may seem like Amazon is restricting what readers can access. It may seem that they are marginalizing authors. The establishment media and many big name, multi-millionaire writers are out in full force to spread this propaganda.
What they are saying simply isn’t true.
While we are saddened that writers and readers are being affected by the negotiations between these two corporations, Amazon is not the one to blame. The players that deserve your derision in this standoff are Hachette in particular, and the New York “Big Five” in general.
You may remember a story from a few years back about the five major publishers breaking the law and colluding to raise the prices you pay for your e-books. These publishers were ordered by the Department of Justice to pay millions in a settlement. Their intent was to price digital books high, stifle innovation, and limit your freedom to read as you see fit. The pressure for this change came from bookstores, from major publishers, and from other online retailers. Amazon fought valiantly, but when ganged up on by a collusive cartel, they had to relent. Fortunately, prosecutors rescued us from this price-fixing scheme, and digital books went back to a reasonable price.
Publishers have a long history of abusing their power. They function as an oligopoly rather than as competitors. They have a long track record of overcharging readers and underpaying authors, because they all agree to do so.
Amazon has a long history of doing just the opposite. Amazon fights for readers by keeping prices low and concentrating on customer service and fast delivery. They make previously hard-to-find books available to readers globally, and they offer a selection unsurpassed in the history of bookselling. They serve rural readers who never had a community bookstore in the first place.
You may have heard that Amazon is putting bookstores out of business, and this is true. The good news is that the bookstores going out of business were the ones that didn’t feel like bookstores. The big discount stores couldn’t compete with Amazon’s prices and selection, and they are going bankrupt. What you don’t often hear is that small independent bookstores have seen three straight years of steady growth. This is something we celebrate.
What we don’t celebrate is the tactics being used by Hachette, a publisher owned by the multi-billion dollar French company Lagardere. We don’t appreciate the misinformation being spread about their negotiations with Amazon. Hachette wants e-book prices to remain as high as possible. They have stated as much to their investors. Amazon wants e-books to be affordable, so that readers can stretch their hard-earned dollar.
All the complaints about Amazon should be directed at Hachette. It is Hachette who wants to charge you more while paying their authors less.
Unfortunately for Amazon, a company that prides itself on customer service, a breakdown in negotiations has meant making decisions that are hard on customers and authors in the short run in order to fight for the rights of those same customers and authors in the long run. At stake here is how e-books are priced. If Amazon wins, e-books won’t cost much more than the mass market paperbacks they are rapidly replacing. If Hachette wins, you will be paying more for a digital book than you used to pay for a paperback. A digital book that you can’t pass along to a friend or sell back to a used bookstore.
High e-book prices are not good for readers, and they aren’t good for writers. But the negotiation terms are not the only misconception you’ll see bandied about. You may have heard that Amazon is making books unavailable. This simply isn’t true. Amazon has turned off pre-order buttons for Hachette’s books, as negotiations have broken down to the point that Amazon may not be able to fulfill those orders once the books in question are released. The books that are supposedly being made unavailable aren’t available for sale anywhere else because they aren’t out yet. These reports are complete fabrications.
You may also have heard that Amazon is delaying the shipment of Hachette’s books. Once again, this is not true. Amazon has stopped pre-stocking Hachette’s books in their warehouses, because the day may soon come when Amazon can no longer carry Hachette’s books. Why would they stock up on books they may no longer be able to sell? Amazon is still fulfilling Hachette orders. It is Hachette’s archaic delivery system that is the cause for the delay. Ask your local bookseller; they will tell you that orders from publishers can take two weeks or more to arrive.
Negotiations between publishers and retailers happen all the time. Recently, Simon & Schuster found itself in a similar deadlock with Barnes & Noble. Many authors were affected, but not by missing pre-order buttons or delayed shipments; their books simply weren’t carried at all. They were shut out completely.
There was little outrage or media coverage when readers couldn’t find the books they wanted at the largest chain of bookstores in the United States. But when Amazon tries to stick to its core values to keep prices low, they’re called a bully and a monopoly and a threat to Rich American Literary Culture. Does that make any sense at all?
The final misconception being thrown about is that Amazon is raising the prices of e-books. This is also not true. What Amazon is doing is charging the price that Hachette sets—prices that hurt sales and that authors hate as much as readers. No one wants to buy ebooks over $10. No one wants to buy hardcovers for $30. These are Hachette’s prices, not Amazon’s. Why would Amazon discount and promote titles it may no longer stock? Why isn’t the outcry directed at Hachette for pricing its e-books so high? Why is there no media coverage for all the measurable good that Amazon has done for the community of readers and writers?
Amazon pays writers nearly six times what publishers pay us. Amazon allows us to retain ownership of our works. Amazon provides us the freedom to express ourselves in more creative ways, adding to the diversity of literature. Unlike the New York “Big Five,” Amazon allows every writer access to their platform. Hachette believes you’ll read whatever Hachette tells you to, and rejects and dismisses many worthy writers. Amazon has built a business based on the belief that you, the reader, can make your own choices about what you want to read.
That is real freedom, of a sort readers and authors have never had before. While bookstores don’t have the capacity to carry every title available, that doesn’t forgive their refusal to carry self-published works and titles by Amazon-published authors. Amazon-published and self-published authors have been truly blacklisted, while Hachette authors equate missing pre-order buttons with having books removed from sale. Most self-published authors do not have pre-order buttons on Amazon, nor does Amazon regularly discount our books while paying us our full amount. We don’t complain about this. On the contrary, we rightfully believe Amazon has treated us better than any publisher ever has.
It’s painful to watch, dear reader, as you are subjected to so much self-serving industry and millionaire author propaganda. The New York “Big Five” devalues readers and authors alike. And now readers may be asked to boycott Amazon—the only company that has ever given all writers a chance to reach an audience, the company that gives all readers a chance to buy the books they love at reasonable prices.
Hachette is looking out for their own interests, not the interests of writers or readers. This approach is consistent with a long history of treating bookstores as customers, writers as chattel, and readers as non-entities. But we believe the Hachette approach is backwards. We know the only players who truly matter are the storytellers and their audience. That’s us. That’s you. We’re in this together.
While most of the major publishers are owned by large media giants, we are small business owners who work from our homes. While Hachette has TV personalities and millionaires taking out ads in major newspapers, we have only a chorus of voices and an appeal for sanity and clear thinking.
You may be urged to boycott Amazon. But a call to boycott Amazon is unavoidably a call to boycott authors who can’t get their books into other stores. Boycotting Amazon is unavoidably a call for higher e-book prices. Boycotting Amazon is preventing us from reaching you. It is an end to our independence.
The best way to support Hachette’s authors is by showing Hachette where you prefer to get your books. Let Hachette know that you agree with Amazon that e-books should not cost more than paperbacks. Help us urge Hachette to stop hurting its own writers. Help us urge them to agree to reasonable terms with Amazon.
It is fitting that Independence Day is upon us. Amazon has done more to liberate readers and writers than any other entity since Johannes Gutenberg refined the movable type printing press. With the advent of e-books and the ability to ship paper books to your doorstep in record time and at affordable prices, Amazon is growing overall readership while liberating the voices of countless writers, adding to the diversity of literature. A large percentage of the e-books sold on Amazon are from independent authors. You have validated our decision to write and to publish. Don’t let the wealthiest of writers convince you to turn away.
We urge you to support the company that supports readers and authors. Amazon didn’t ask us to write this letter, or sign it. Amazon isn’t aware that we’re doing this. Because in the end, this isn’t about Amazon. It’s about you, the reader, and the changes you’ve helped bring about with your reading decisions. You are changing the world of books, and you are changing our lives as a result.
(The unanticipated outpouring of support and the thousands of signatures in the last few days are greatly appreciated. Readers and writers alike have responded to what was organized as an open letter and has become a call for an end to this standoff. We hope our chorus of voices will help convince Hachette to negotiate on behalf of the best interests of its authors and its readers. As readers, we believe in reasonable prices for e-books. As writers, we believe in a fair share of e-book profits. And we all want an end to the harm being caused to Hachette's authors.)
Signed, concerned readers and writers.
- Michael Pietsch, HBG CEO
Please help put an end to these negotiations. Accept Amazon's offer to create a 50/50 joint fund to support your authors. And then work on a resolution that keeps e-book prices reasonable and pays authors a fair wage.
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