Monday, August 11, 2014

A Letter to Hachette

Below is my response to this letter that I received from Amazon. Would you add your voice too?

Dear Mr. Pietsch,

First I want to sincerely thank you for your invaluable work in promoting reading, authorship, and literacy both in the United States and around the globe. I firmly believe that reading is essential to any healthy society. For that health to occur the society needs both books and readers.

As both an emerging author and an avid reader I ask that you focus your efforts on helping both authors and readers.

In your negotiations with Amazon, please consider not only the bottom line for Hachette, but the overall impact of literacy on the world. Both Hachette and Amazon are businesses and have income as the top priority. Both companies use books as a means for making money. In that, both Hachette and Amazon are in agreement. As an author I agree too. Both the creators and distributors of the content should receive fair compensation for the work.

The issue then comes in determining what is fair. It seems that there is a limited amount of money and a limited number of ways to divide that money amongst the interested parties. Amazon has built the most popular book-buying platform the world has ever seen. Hachette works with editors, cover designers, typesetters, and numerous other people to take a manuscript from draft to publication. And authors often invest years of their lives in creating whole new worlds for people to explore. They all deserve to be compensated for the work they've done.

One option for increasing revenue (which is what Amazon, publishers, and authors all want) is to increase the price of the product. That will certainly work to increase revenue from those sales that are guaranteed. When best selling authors put out a new book that readers demand to have -- at any cost -- revenue will go up. This will certainly benefit the publishers who have signed those best selling authors as well as those authors with the cache to demand any price for their work. However the consumers do not have an unlimited amount of money to spend, so an increase in spending on one author usually necessitates a decrease in spending elsewhere -- likely on other books.

Here's what concerns me -- as an emerging author -- Hachette, and other "Big-5" publishers rely overwhelmingly on ebook income from best selling authors (63% of Big-5 ebook income is from established authors). So an increase in ebook prices disincentivise the readers to buy more books, and disincentivise publishers from signing more authors. That, in turn, disincentivise emerging authors -- like me -- from working with a publishing house.

However, it is possible to incentivise authors, readers, publishers and consumers to read more, write more, sell more, and publish more.

Ebooks are, essentially, disposable reading. One cannot resell an ebook, nor give it away (legally). A paper book has value. My shelves are filled with them because I know I can access the content at any time. My shelves have also seen countless paperback novels -- for a time -- I would purchase them either new or used, read them, and then sell them to a used bookstore or give them away. Ebooks are the paperbacks of the modern world. They are cheap to produce and distribute, they allow more people to read a work, and when the reading is over there's no sense of loss in disposing of the book.

Look at the mass market paperback bestsellers from Barnes & Noble for the week ending August 5, 2014. Not a single book is priced higher than $10. Without even looking at the bookseller's discount, the average list price for the top 20 bestselling mass market paperbacks is $8.94. That's $9 for a physical book that had to be printed and shipped. It's likely that half of the cost of those books is tied up in just the production and materials leaving only $4.50 for the authors, booksellers and publishers to split as profit.

Ebooks, on the other hand have virtually no production cost. All of that money is available to split between the interested parties. And at the same time, the consumer has nothing other than the words. No book to resell or loan to a friend. Nothing to donate to a charity or library, simply the words written and electronically transmitted to them.

As a reader, if you price an ebook above $9.99 I won't buy it. I'll wait in line to get it from the library, buy it for $9.99 in mass market paperback or just wait for it to arrive at my used bookstore for half the price.

As an author I can't afford to price my books above $9.99 because people don't buy them -- not from me at least. I don't have a big name or wide audience, but I'm selling books -- nearly all of which are ebooks. As author income is collapsing (The Guarding calls it "abject levels."), I and those like me are faced with a choice. We can give up the dream of writing, reduce the pool of available manuscripts available for publishing and undermine the entire book industry. Or we can look elsewhere for income. Some have decided that self-publishing, with all its pits and mires, is preferable to the ever-shrinking pool of money available to those in the trade publishing world. In fact, there are now more self-published authors earning a living wage than there are Big-5 authors earning a living wage.

So it comes back to the negotiations between Amazon and Hachette. I hope you can see that I want Hachette to continue to earn money. I want Hachette's authors to continue to publish high-quality books. And I want the world to continue to benefit from a wealth of knowledge and creativity found only through reading. Reducing the price of ebooks will sell more books, make more money and drive more people to become authors. It's better for the industry, the readers and the writers.

Keeping ebook prices artificially high will, for the short term, benefit Hachette by milking more money from the avid fans of the big-name authors. But what will you do when those authors are gone and you have no one else to replace them?

I am an author and a reader and I want ebook prices to be lower.


James T. Wood

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