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.
The 19th Century, now known as "Just ahead of World War II". What they're actually thinking of here is Allen Lane Williams and his celebrated moment of genius at a railway station when he reasoned that he could sell cheap single read quality books to travellers. The company he founded soon failed utterly and absolutely did not become Penguin books or anybody like that, but if they had we wouldn't mention that because Penguin are one of the Big 5 and we hates them, precious. Every time Bono claps his hands, a Penguin employee stamps on a puppy.
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.
Yeah, because it's not like that was the business model or anything.
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.
NO! NOT THE DASTARDLY GEORGE ORWELL! The full quote, you may be DELIGHTED to hear, is "the Penguin Books are splendid value for sixpence. So splendid that if other publishers had any sense they would combine against them and suppress them." I'm honestly not sure if you don't understand sarcasm, or if you are deliberately quoting Orwell out of context to support your agenda.
Ah, no, that couldn't possibly be it.
Well… history doesn’t repeat itself, but it does rhyme.
It's true, I'm confused.
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 they American? Because based in America is not the same thing.
– 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.
And, of course, there's no editing. No cover artist. No type setting. No marketing. All those other costs associated with a normal book don't exist in the magical world of e-publishing.
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.
How much tax did Amazon pay in the UK last year, again? I forget, but I absolutely sure it was an amount which is respectful to Amazon's UK customers.
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.
While I know I buy more books now, I don't think the ability to buy Dinosaur Porn at 3am can justifiably be cited as an improvement to the world of Arts and Letters.
I hope you're right about e-books making the book world stronger, but I shudder to think of a world without trade publishing. There are plenty of great self-publishers, but there are more terrible ones and the vast majority who just aren't very good. A world without trade publishing makes it more difficult for me, the reader, to find the things I want to read.
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.
WOW. It's like you're spying on me, because I've frequently gone to read a book and inexplicably found myself watching television instead. It's like I can't make a decision about what I want to do - maybe books need to raise their game. If they were more entertaining, I wouldn't be on the facebook all hours of the day.
I know you have problems with sarcasm, so know this: I read a book when I want to read a book. I do other things too.
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.
And if you create a desirable object, people will pay money for it.
The statistics you should actually be showing me in this paragraph are those which demonstrates the ebook market has expanded the overall book market. If there were no ebooks, I would have to pay for a physical book - you need to demonstrate that your low priced ebooks make me more profit than if they didn't exist.
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.
Or, he would be if that's what he'd said.
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.
I'm sorry, I can't hear you over the sound of this article about the petition to pay Amazon's warehouse workers a living wage, which accrued 40,000 signatures in 2 days.
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.
Well, I think that 100% thing is a great idea and I assume Amazon will be arranging the legal contracts for everybody and paying my lawyer to look over it.
Hello? Are you still there?
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.
Oh, don't worry, I'll be emailing Michael.
Hachette CEO, Michael Pietsch: email redacted by me because of spambots
Copy us at: email@example.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.
They absolutely should not follow the laws of capitalism whereby desirable objects (such as brand new books) have higher price tags.
- Lowering e-book prices will help – not hurt – the reading culture, just like paperbacks did.
THINK OF THE CHILDREN, MICHAEL. They're probably out stabbing people because e-book prices are too high. Or helping those Penguin reps stamp on puppies.
- Stop using your authors as leverage and accept one of Amazon’s offers to take them out of the middle.
Yeah, I mean, what kind of bastard are you? You should totally disregard all those legally binding contracts this instant.
- Especially if you’re an author yourself: Remind them that authors are not united on this issue.
You're not wrong there.
Thanks for your support.
The Amazon Books Team
P.S. You can also find this letter at www.readersunited.com