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Discussion Starter #1
I cannot believe it! Anyone else seen this yet?

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: [email protected]

Copy us at: [email protected]

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
 

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This is just getting too delicious. My, I enjoy watching this unfold (or explode, depending on your outlook...)
 

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I got it too. Not sure how I feel about it. Amazon has put me through the wringer--though I'm making money with them (and only them). I see them as something of a doubled-edged blade. They are a corporation, yes one that is making me money, but it's not they are not a non-profit selling books at cost & battling the evil big publishers.

Oh and the letter is too long-winded. Economy of words, we're authors.  ;D
 

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I smell a fairly large rodent.

Delete it, sez I. This is a fight of companies. Enlisting authors to do this makes me feel sick and I can't believe that Amazon itself would OK this.

Hachette is not your friend.
Amazon is not your friend.

They are large companies. NOBODY understands precisely what this spat is about and all the things that are involved in this dispute. It looks silly to ape some company's slogans without the insider story. Come on people, grow a brain.
 

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I just got one too and something doesn't feel right about this. I just can't imagine Mr. Bezos authorizing an email asking self-pubbers to take sides. I'm not touching this thing.
 

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Discussion Starter #11
JeanneM said:
I just got one too and something doesn't feel right about this. I just can't imagine Mr. Bezos authorizing an email asking self-pubbers to take sides. I'm not touching this thing.
I WAS a bit surprised, I must admit, but the header seems to be from amazon. I haven't done anything with this and may just watch this thread for someone important like Hugh or Elle to chip in. I am interested in everyone's opinion, but we need someone more likely to be in the know I think.
 

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Yep, I got it too.

I could have sworn I read that bit about "healthy reading culture" here on KB somewhere... But where? Was it in the Hachette mega thread?

Broadly speaking, though - This whole dispute is seriously fascinating. I don't pretend that Amazon's slate is ever squeaky clean, or even that they're not out for global domination... But seriously, the smell of BS is much stronger from the Hachette side of all of this.
 

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I agree. I'm not very important in the scheme of things. Gee, I hope someone really important expresses an opinion soon.
 

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I got it too. It bothers me that the sentence "Remind them that authors are not united on this issue." is followed by the link to the Amazon side of the story: ReadersUnited.com.
 

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Not sure what to make of this at all. If I were to guess, I'd say the KDP Team's been hacked.

The 'Further Reading' from the linked page includes a couple of Hugh articles, among others:

Further Reading

The Industry View - Amazon vs Hachette (If you read just one piece, we recommend this one)
JJ Marsh/David Gaughran | July 30, 2014

Amazon-Hachette Debate Yields Diverse Opinions Among Authors (We recommend reading the comments on this one)
Authors Guild | July 23, 2014

Change.org: Petitioning Hachette: Stop fighting low prices and fair wages
Writers and Readers | July 3, 2014

Authors United? I Wish it Were So.
Hugh Howey | July 23, 2014

The Seattle Times: The publishers, not Amazon, keep authors down
Frank Schaeffer | July 21, 2014

The Heart of the Matter
Barry Eisler | July 30, 2014

Let's Get Visible: Amazon v Hachette: Don't Believe The Spin
David Gaughran | May 26, 2014

Winning at Monopoly
Hugh Howey | May 31, 2014

The Huffington Post: Sympathy for the Devil: In Defense of Amazon
Mishka Shubaly | June 5, 2014

GigaOm: If you love books then you should be rooting for Amazon, not Hachette or the Big Five
Matthew Ingram | July 2, 2014

Could it Be any Clearer
Hugh Howey | July 30, 2014

The Cockeyed Pessimist: Who's afraid of Amazon.com
Martin Shepard | May 27, 2014
The way all of this is presented lacks the type of polish and professionalism I'd expect from Amazon correspondence. But then again, maybe this is Bezos' way of getting down and dirty, speaking to 'the people'.
 

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I believe ebook prices should be on the low side. I am more in agreement with Amazon's position than Hachette's. I wrote Mr. Pietsch. Not that he'll give a rip what I think, but as I can't afford an ad in the NYT an email has to do. It being digital and all...
 
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