July 9, 2014

Amazon shows authors how much it cares about them by offering a condescending publicity stunt


Remember this publicity stunt? Amazon just cooked up another one---and this time the mark is Hachette authors.

Remember this publicity stunt? Amazon just cooked up another one—and this time the mark is Hachette authors.

Having clearly realized that it’s losing the battle of public opinion in its war against Hachette, Amazon continued its PR offensive yesterday by sending an odd, condescending letter to Hachette authors with an odd, condescending offer. According to the New York Times‘ David Streitfeld:

David Naggar, an Amazon executive who works with publishers and independent authors, sent a letter this week to a small group of Hachette writers proposing “a big windfall for authors” by taking them “out of the middle” of the dispute, according to a copy of the letter that was seen by The New York Times.

The letter extends and develops a proposal Amazon made earlier in the dispute, which was dismissed by Hachette. It now offers Hachette authors “100 percent of the sales price of every Hachette e-book we sell.” Amazon also offered to suspend all its shipping delays and price adjustments, which it put in place in an effort to bend Hachette to its will.

According to Gigaoms Laura Hazard Owen, the letter was also sent to a small group of literary agents and to Authors Guild president Roxana Robinson. Robinson didn’t take the bait, telling the Times:

“If Amazon wants to have a constructive conversation about this, we’re ready to have one at any time,” she said in an email. “But this seems like a short-term solution that encourages authors to take sides against their publishers. It doesn’t get authors out of the middle of this—we’re still in the middle. Our books are at the center of this struggle.”

Laura Hazard Owen also posted the full letter in her report, which is worth reading in full. An excerpt is below:

Our first choice would be to resolve a dispute like this through discussion only. We tried that already. We reached out to Hachette for the first time to discuss terms at the beginning of January for our contract which terminated in March. We heard nothing from them for three full months. We extended the contract into April under existing terms. Still nothing. In fact we got no conversation at all from Hachette until we started reducing our on-hand print inventory and reducing the discounts we offer customers off their list prices. Even since then, weeks have gone by while we waited for them to get back to us. After our last proposal to them on June 5th, they waited a week to respond at all, promising a counteroffer the following week. We are still waiting a month later.

We agree that authors are caught in the middle while these negotiations drag on, and we’re particularly sensitive to the effect on debut and midlist authors. But Hachette’s unresponsiveness and unwillingness to talk until we took action put us in this position, and unless Hachette dramatically changes their negotiating tempo, this is going to take a really long time.

Here’s what we’re thinking of proposing to them:

• If Hachette agrees, for as long as this dispute lasts, Hachette authors would get 100% of the sales price of every Hachette e-book we sell. Both Amazon and Hachette would forego all revenue and profit from the sale of every e-book until an agreement is reached.

• Amazon would also return to normal levels of on-hand print inventory, return to normal pricing in all formats, and for books that haven’t gone on sale yet, reinstate pre-orders.

Here’s an example: if we sell a book at $9.99, the author would get the full $9.99, many multiples of what they would normally get. We can begin implementing this arrangement in 72 hours if Hachette agrees.

We haven’t sent this offer to Hachette yet—we’re sending this to a few authors and agents to get feedback first.

What do you think? Would this be helpful, especially for midlist and debut authors?

There’s a lot going on here—and none of it seems aimed at actually resolving the dispute with Hachette. Instead, you have a lot of blame-shifting in what otherwise appears to be a wild Hail Mary attempt to get Hachette authors to turn on their publishers. (They won’t.) There’s plenty here, too, for Amazon’s rabid defenders, though they hardly need the ammunition. 

The blame-shifting is par for the course—Amazon realizes that it’s being blamed for the standoff and wants Hachette to take some of the heat. In the letter, they accuse Hachette of delaying negotiations—in fact, they say that Hachette wouldn’t talk to them at all “until we started reducing our on-hand print inventory and reducing the discounts we offer customers off their list prices.” In other words, Amazon didn’t reduce on-hand print inventory as a negotiating ploy as such, it did it to get Hachette’s attention. All of this may be true—I expect it’s partially true, especially about waiting for a counter-offer—but it is, given the source, wildly one-sided. It’s highly unlikely that things went down this way though, again, I’m sure there’s at least a kernel of truth.

The fact that Amazon is playing coy to such an extent makes considerably more sense when you get to the offer itself—Amazon not only wants to claim that it’s completely innocent in the dispute itself (even though no one’s going to buy that), but it wants to show Hachette authors how much it cares for them by offering them the sales price on every ebook sold—a price that’s often less than what Amazon pays Hachette. If Amazon sells an ebook by a Hachette author for $9.99, the Hachette author gets $9.99. The return to “normal inventory” (which seems like something that would be hard to determine, given Amazon’s byzantine ordering algorithms) and pre-order buttons would also be a boon to Hachette authors, who have been hit hard by the dispute.

And that’s a pretty good deal—Amazon is right when it says that it’s “many multiples of what they would normally get.” But there are a few highly relevant points to consider before looking at why Amazon is making an offer like this. First, and most importantly—in fact, this is really the only essential point here—Amazon has not made this offer to Hachette. This is, for all intents and purposes, a publicity stunt because Amazon knows that Hachette would never—not in a million years—agree to something like this, which would disrupt contracts, business models, and the industry itself. Higher author royalties on ebooks are one thing—and they may not be a bad thing—but this is something altogether different. Amazon controls roughly 80% of the ebook market in the United States and accounts for 60% of Hachette’s ebook sales—Amazon can easily take the hit, as it also sells soap and socks (and a few other things, I’m told), but Hachette can’t. Amazon wants this offer to look like two multinational conglomerates coming together in the best interest of authors, but the result would be a public relations boon for Amazon and a huge loss in revenue for Hachette.

The fact that this is a deal that Hachette would never take remains important. Amazon, after all, made a similar offer a few months ago, when it offered to start an author pool for Hachette authors—on the condition that Hachette would fund the other 50%. Again, Amazon could surely afford to give authors 100% of sales (Hachette can’t), but this show of magnanimity from the High Lords of Neoliberalism in Seattle changes when you consider it’s a complete pipe dream—I doubt Amazon would make an offer like this if they thought Hachette would take it. Regardless, it does absolutely nothing to resolve the dispute with Hachette or to create a healthier bookselling environment. Nothing. Nada. Zilch. It’s a publicity stunt.

It’s certain to be a winning one for one group, if Hugh Howey‘s Twitter feed is to be believed. It’s possible that Amazon just put this out there to give ammunition to its group of defenders, like Howey, and David Vandagriff, who it recently flew to New York to defend the company at the New York Public Library. This is a group that doesn’t really need evidence—they see their own success as proof that Amazon loves authors and is the savior of publishing, hallelujah—but it does give them something to point to when people oversimplify this dispute by painting Amazon as the devil and Hachette as a martyr.

It’s less likely that this will be effective with Hachette authors. It may be a Hail Mary to win over a few high-profile (or at least vocal) authors to their side, but Hachette authors have been following this dispute closely and Roxana Robinson clearly speaks for the majority of published authors when she says “this seems like a short-term solution that encourages authors to take sides against their publishers. It doesn’t get authors out of the middle of this – we’re still in the middle. Our books are at the center of this struggle.”

She’s also right. Amazon makes a big stink about the effect this has had on many Hachette debut (Edan Lepucki excepted) and midlist authors, which has been devastating, if not catastrophic. You never get your first week of sales back. And if Malcolm Gladwell is losing 50% of his sales, what about debut writers? Regardless, the best way to help debut and midlist authors isn’t by condescending to them with pie-in-the-sky fantasy offers. It’s by thinking about what’s in their long-term best interest, which is resolving this dispute in a way that’s conducive to both sides. PR stunts—hey, remember drone delivery!—are great, but they don’t do anything to help anybody.

Shortly after Amazon’s letter leaked to the press, Hachette released this statement:

“Amazon has just sent us a brief proposal. We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion. We believe that the best outcome for the writers we publish is a contract with Amazon that brings genuine marketing benefits and whose terms allow Hachette to continue to invest in writers, marketing, and innovation. We look forward to resolving this dispute soon and to the benefit of the writers who have trusted their books to us.”

Amazon quickly hit back with a snarky rejoinder:

“We call baloney. Hachette is part of a $10 billion global conglomerate. It wouldn’t be ‘suicide.’ They can afford it. What they’re really making clear is that they absolutely want their authors caught in the middle of this negotiation because they believe it increases their leverage. All the while, they are stalling and refusing to negotiate, despite the pain caused to their authors. Our offer is sincere. They should take us up on it.”

Baloney! Here’s something that isn’t baloney: Amazon has pretty much all the leverage here—it controls the majority of the book market in the United States, which is pretty damn good leverage if you ask me. Sure, Hachette has public opinion on its side, but, when it comes to business negotiations, I’ll take economic leverage over public opinion every time. Oh, and by the way, Amazon is a $100 billion company.

Their offer may very well be sincere, but that doesn’t change that the fact that it’s a publicity stunt. Maybe Amazon should do something radical—something that actually helps struggling authors—and make a sincere offer that actually does something to resolve this mess.


Alex Shephard is the director of digital media for Melville House, and a former bookseller.