Is Indie publishing a bubble destined to burst ala the housing market?

Discussion in 'Writing' started by Carlyle Clark, Feb 3, 2012.

  1. goldhawk

    goldhawk aurea plectro

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    Of course, if Amazon did not set the price of the ebooks, it would never make those kinds of mistakes. :(
     
  2. KatG

    KatG The Bony Hand of Death Staff Member

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    My point in posting the link was not to argue about e-book prices. Nor to castigate Amazon. It's to point out re what we were discussing earlier that Amazon's contract gives it total control over what self-published authors are doing on their site and through their apps on other sites and machines. It can re-write the contract terms and the royalties split at any time, set your price to $0 forever, change your cover, vanish your book, etc., and gives Amazon a considerable chunk of control over the author's rights in the property without paying a cent for them and with no conditions.

    This is, again, not necessarily an unworkable deal for authors. But it is a deal in which you have no negotiation leverage, very little control and little legal recourse. And it's important when self-published authors are entering into such a contract that they understand this, that they understand the power they are handing over to Amazon and other electronic vendors in doing such a contract. It is important that they pay attention to what in Amazon's policies and statements may change, indicating their arrangement with Amazon may change and suddenly. It's part of being a business person, one who has fewer resources as Jim points out than publishers do when actions work against them. And in the argument that self-publishing lets you keep more money than working with publishers, it's a factor. Self-publishing authors can potentially get a larger cut now from electronic vendors. This could change tomorrow. And even if it doesn't, Amazon's accounting is shrouded in secrecy and certainly not secure. Other companies may be even harder to pin down. So these are factors that self-publishing authors have to realistically calculate when deciding what gambles to take and not take with Amazon and other companies, including POD companies like CreateSpace. Those contract terms are important to pay attention to, and if necessary and possible, may need legal advice.
     
  3. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    All valid points but here is the defining issue for myself.

    If Amazon does something I don't like - guess what - I can stop using them. I can take my titles down and do whatever the heck I want from that point on.

    In a traditional contract...the publisher may terminate YOU at anytime they want, but you cannot sever the relationship. A publisher can price your books at anything they want...you have no say. They decide the cover...you have no say. They decide on the title...well you get my point. From what I've been told all big-six contracts are for the term of the copyright (life + 70 years) and while in the past, they would terminate when they go out of print...the advvent of ebooks may mean that they never go out of print and will be enforced for basically forever.

    I'm much more concerend about the terms of a contract I can't leave then one that I have the right to walk away from. But that's just me.
     
  4. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    My wife (who is the number cruncher) has been very busy...but I finally got her to run some numbers for me to illustrate my point. I'm not going to go into the nitty gritty of the calculations (unless someone wants me to but this will demonstrate how a publisher takes a bigger "bite" from a successful title then an unsuccessful one - even with the same contract terms.

    For this example we'll assume the following:
    • Trade paperback: $14.99, ebook pricing: $9.99
    • Royalty 7.5% on list of print, 25% of net for ebooks
    • Percentage of books sold in each format: 30% ebooks, 70% print books
    • 30% returns on print, 0% returns on ebooks
    • Distribution fees 50% for print, 30% for ebook
    • Print cost $1.50 per book, $0.0 for ebook
    • $10,000 advance

    If someone wants me to run the calculations with different assumptions let me know as Robin gave me a nice spreadsheet where I can play different what if scenarios.

    So let's look at a low selling title - say with a print run of 2,000 (1,400 print books (after returns), 467 ebooks). We would have the following:
    • $25,648 Total Income
    • $ 756 Publisher Share (2.9%)
    • $10,000 Author Share (39%)
    • $14,892 Costs (printing & Distrbution) (58.1%)

    The publisher didn't do too well on this title. But now let's make it a bit more successful and have the book sell 5,000 copies
    • $64,120 Total Income
    • $16,891 Publisher Share (26.3%)
    • $10,000 Author Share (15.6%)
    • $37,229 Costs (printing & Distrbution) (58.1%)

    That seems like a reasonable success and a reasonable share between the parties. But now lets examine what happens if the author earns out, which occurs at around 8,380 copies.
    • $107,465 Total Income
    • $ 35,056 Publisher Share (32.6%)
    • $ 10,013 Author Share (9.3%)
    • $ 62,396 Costs (printing & Distrbution) (58.1%)

    Now the publishers "bite" is three times the amount the author makes - and it will just continue to be a huge disparity the more books that sell. If we go up to 15,000 books the break down is as follows:
    • $192,360 Total Income
    • $ 62,750 Publisher Share (32.6%)
    • $ 17,924 Author Share (9.3%)
    • $111,687 Costs (printing & Distrbution) (58.1%)


    So you can see the "bite" from the profits of the book break down as follows:
    • 2,000 copies (low sales) - publisher cut is 2.9%
    • 5,000 copies (mod sales) - publisher cut is 23.6%
    • 8,360+ copies (high sales - author earned out) - publisher cut is 32.6%

    This is the what I was trying to say about how bigger performing titles will provide the publishers with the income to offset the low performing sales. The author will earn significantly less than the publisher for a good selling title, but could earn the lions share of the profits on a poor sellling title.
     
    Last edited: Feb 21, 2012
  5. KatG

    KatG The Bony Hand of Death Staff Member

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    In the meantime, they've stolen money from you that you can never get back because you signed a contract that said that they could do whatever they want and steal money from you. You signed a contract that says they control the price of your book, not you. Any damage they do to your sales by their choices or loss of sales from their keeping you from selling on other sites you basically agree to. And while you can theoretically take your titles down and go elsewhere, theoretically, Amazon can change the terms of your contract to say that they still have your rights and can sell the books and keep all the money from them (there have been some incidents.) I'm not saying that their contract is necessarily a bad deal but a contract that they can change at any time and you can't has effects and self-published authors have to consider those effects versus the possible benefits in making decisions about Amazon or any other vendor.

    You can sever the relationship if they don't publish the book within a set time period and from several other clauses. But once you give them the license and they live up to their parts of the agreement on it, you can't just revoke the license because you feel like it. If you could do that, there would be no point in publishers entering into licenses with authors because there's no certainty they'd ever recover production costs because the author would block them selling what they printed or produced in electronic format. (Amazon, by contrast, has no real production costs to lose -- you are the one doing most of the work, etc.) The publishers would just do writer for hire contracts where they own the rights to the work, like tie-ins. You're trying to say that the two types of contracts are the same beast, but they aren't.

    Because you granted them the license and because you don't work for them or own the publisher. Again, if they let every author control for his or her own book printing, manufacture, pricing, book cover, demand promotion commitments and essentially act as their boss, they would not recover their costs spent on the books and would not realistically be able to operate. They cannot agree for you to be the publisher of Bantam Books, say, if Bantam is publishing your work. Again, you're trying to say that the relationship and circumstances with Amazon and the publishers are the same, but they are two entirely different set of business factors and business arrangements. Bantam is putting out a line of books. Amazon is simply providing a sales platform.

    And again, you don't get to control the price of your books on the Kindle and Kindle Apps -- Amazon does and you agreed that they had this control. As Jim discovered, Amazon could set his price to anything they wanted and he would not get the money back that he lost by having that control taken away from him.

    All publishing license contracts are for copyright term. Working with a small press, you get the same deal.

    That's one of the things that is being negotiated as the market develops, along with who owns electronic rights from old contracts -- a fight publishers have lost in court so far. But no, publishers will not be able to use the print out of print rules regarding e-books for very long. It's not a feasible system and they are already having to retreat from it. Authors are getting rights to their backlist and self-pubbing them. But it's also not fair to have the publisher do a Kindle edition for a new book and then demand the rights back so that they lose their costs and you take over the Kindle edition they produced on the license. So there are a lot of issues to work out. But again, there are a lot of issues to be worked out with Amazon too, who can essentially hold on to your rights forever because you gave them carte blanche in the contract to change the terms so that they can have them forever if they feel like it.

    But again, you only have the right to walk away from the Amazon contract if Amazon says you have the right to walk away from it. You agreed to a contract with them that says they can change the terms whenever they want and they have better lawyers. The amount of freedom you have is only what Amazon says you have. So you basically have to hope that they don't want to screw you on your self-pubs. Whereas the publisher cannot simply change terms of the contract without your consent. The publisher is restricted, Amazon is not. The publisher has contractual obligations, Amazon has none. The publisher has to offer your product for sale or the contract can be ended, Amazon does not have to let you sell your book on their site but the contract is still in force. The publisher has to invest money into the rights of the license, Amazon gets the electronic rights for free. And while you can probably walk away from the contract with Amazon, it's again dependent on Amazon's willingness to allow you to do so. Nothing is free. :)

    And for both poor selling and well selling, the publisher takes all the costs of the risk, which are mountains higher than you could manage on your own. That you can go to the e-book market and have relatively low costs and possibly sell large amounts of copies which if the electronic vendors actually pay you for them can result in high amounts, doesn't change the fact that what the publisher is doing with the license costs lots of money. Those are business factors that you can't pretend aren't there. But that doesn't mean that continuing with a publisher in a license arrangement will work for you. What it does mean is that self-pubbing electronically with e-vendors and entering into a licensing partnership with a publisher, big or small, are not the same things and cannot operate the same ways. And it doesn't mean that Amazon can't change its share of monies received for e-book sales whenever it feels like it with your agreement. You have to hope that Amazon keeps the arrangement the same or improves it, or that you can get a better contract with them that gives them less control and flexibility.

    Also, $0 cost on e-books for a publisher is wrong. This is a claim that authors make a lot in these arguments, but no amount of wishing makes it true.
     
    Last edited: Feb 22, 2012
  6. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    As far as I know if Amazon reduces the price of your book (except in the case of price matching a lower price) they will pay you on list price. This occurred with one of my wife's titles where they put a $4.95 book in their monthly 100 books at $3.99 or less promotion. To get into that promotion they lowered the price to $2.99 but royalties were still being paid at the $4.95 price. A day or so into the promotion, they wrote her and gave her a choice to leave the promotion or agree to the price change, but the hundreds of books that were sold when they changed the price "on their own" had royalties paid at full credit.

    As to Jim Hines case...it's probably that there was a price match and he just didn't realize that the price was lower somewhere. I also saw this happen when I temporarily lowered a price of one of my books. The issue is it was low for only a few weeks, but one venue (I think it was Kobo or Diesel) actually didn't get the price lowered until weeks later - and after the price had already returned to the higher price. When I saw the price drop I immediately went looking for the low price (as did Jim) and at first I didn't see it. But then I wrote Amazon - and they pointed me to the site with the lower price.

    I don't think there is any widespread "stealing of money" there may be individual glitches like the sample being mistaken for a full book but even in that case I would argue the "marketing" aspect of those free downloads more than make up for the lost revenue. The person didn't loose 6,000 sales because it was only because it was free that so many eyeballs paid attention. I don't know how many would have sold "at the full price" but it was an honest mistake.

    I'm sure we can both speculate on wild "theoriteical possibilities" but do you really think this would happen? It would be theft and multiple lawsuites would spring up, and win under such situations.

    There are other incidents in publishing that have attempted to change a contract without the consent of the author. I'm sure they are being fought as they are not kosher. Harlequin recently sent a letter to all authors that they were changing royalty rates on ebooks and if you didn't contact them in x number of days it basically acted as an addendum to the contract. In the case of a contract both parties must agree, and sign, on the changes.

    In the case of Amazon, there is no "contract" you are agreeing to "terms" in using their service, and it is not uncommon for organizaitons to revise terms and have them take effect simply by posting them. It is a common practice, and if you are concerned...well don't use them.

    But it doesn't change the fact that you are in a worse situation in the case of a publishing "contract" as you have no control. Don't like the cover...too bad...don't like the price...too bad. They could set the price too high and make it impossible to sell, or too low and your cut is essentially nothing.
    At the time you sign the contract very little is known and you are putting a lot of faith in the pubisher to do things right. If they do a good job, you are in fine shape, if not...your career can be seriously harmed and there is no recourse.

    No, I'm not saying they are the same...I'm saying one is a contract that puts you at the complete mercy of the publisher, the other is a service that you can use or not use at your own choosing. Not the same at all.

    We are in total agreement that the business factors are different, in one case you are essentially selling something of value (the right to produce your work) and that comes with a certain degree of handcuffing. In the other scenario, you are your own boss and have complete control over all aspects.


    I think this is a misrepresentation Amazon allows the publisher to set the price. They may have some language to account for "if we make a mistake" In Jim's case, they corrected the situration and not even he cares about the $20 he lost. The Amazon model is very clear.

    • You set the price and are paid 70% for ($2.99 - $9.99) and 30% outside that range.
    • Amazon can and will price match if you have a lower price elsewhere. (I suspect in Jim's case the trigger was becuase of the lowering he did at Christmas and the systems were out of sync from time of detection to taking effect.
    • If they lower the price withouth your consent, they will pay you on list price.

    Amazon is not on some grand scale going behind authors backs and setting whatever price they want. Yes, they'll sometimes put a book into a promotion, but they will pay full price if they do Yes, they'll do price matching in an effort to have the "best price" on the market and sometimes those algorithms might have a glitch. The language in the terms is limiting their liability when a glitch occurs.
     
  7. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    This is not true, I know many small publishing houses that sign for a set period of time. Most are about 5 years, although some are as few as 2. My contract with a small press AMI was copyright term, but they are not universal. My wife's small press offers a 3 year term, but an author can leave with a 30-day notice at anytime they desire.
     
  8. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    Saying that Amazon "can essentially hold on to your rights forever" is a) untrue, and b) a little bit of fear mongering. Their terms of service don't come anywhere close to saying this...Amazon has not reported a desire to make such a change, and if they tried it wouldn't hold up in court.


    No...there is no "Amazon contract" there is an agreement to terms WHILE USING their service, no rights continue after you stop using the service. A contract is something very different...it has a "length of time", both parties sign, it cannot be changed once executed, without signature. Terrms of service lay out the rules while you use the service being offered. One you quit using the service the terms no longer apply.

    I see the "restriction" differently...being unable to sever a relationship is a "restrction" (albeit one that I agreed to in the case of a CONTRACT with a publisher). Amazon can make their terms whatever they want, but I'm not restricted as I can terminate my use of their service...and no they can't make the terms of their service be that I can't terminate my use of their service.

    (Emphasis mine) Actually, if you read most contracts, they say they must produce the book...it doesn't say they have to offer it for sale. I know it would make no sense for them to do such a thing but since we are arguing what "could" happen, it is possible for your books to be held hostage forever and you have no recourse (which is why I suggest authors have their contracts to say "produce and make available for sale.")

    Once again there is no "contract" in force with Amazon.
     
  9. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    Which is why I had likened publishing to venture capital in that they are investing significant amounts of cash - and will fail more often then they succeed. As such...when they do get a "winner" they take the lion's share.

    He who takes the risks - reaps the rewards, in the case of traditional publishing - it is the publisher, in self its the author. I'm not saying that the publisher doesn't deserve to make this "bigger bite" I'm just pointing out that in the case of a successful book the author's share is dwarved by the publisher's - it isn't a matter of "right" or "wrong" it is the economics of the system.

    Emphasis mine....why add this cavet? Is there any example of Amazon, Kobo, Apple, or smashwords NOT paying authors their share? Can the same be said about traditional publishers? The SWFA is constantly putting various publishers on probation for not making timely payment of royalties, so adding this cavet to the "publishing" side of the equation would be valid, but to plant the assertion on the ebook vendors used by self-published authors is planting a seed of doubt that has no basis in fact.

    I'm not trying to pretend they aren't there....In fact I'm highlighting the differences between the two models so that authors can make informed decisions. Personally...traditional publising is a risky business and I don't know why the traditional publishers continue to operate in an environment where so much is stacked against them. If they didn't offer advances, didn't give full credit for returns, used pod for small selling titles rather than large print runs they would reduce their costs and their risks. Small publishers have already adopted such practices and they benefit from doing so.

    Finally a point of agreement...yes Amazon can change their share anytime they want...and I can vote with my feet if I don't like their changes.

    Again there is no contract, but I've beaten that horse sufficiently.

    You have never seen me make a case for $0 on ebooks for a publisher. But the "incremental" cost of producing an ebook (if a print books is also being produced) is very small...miniscule in fact. My wife's company produces both print and ebooks and since the majority of the sales are ebook she attributes the costs of editing/cover/design etc to the ebook format as the print is, for all intenents and purposes, a subsidary right.

    But in traditional publishing print dominates so the sunk costs are required to produce the print book and then to make a subsidary version of an ebook takes a few hours to do the conversion, a reasonable amount of time for testing. So the additional amount to produce it is VERY small. My wife converts from Word to ebooks in about 1 - 3 hours depending on book complexity.

    Overhead costs, (outside of printing/warehousing/returns), should be shared across the formats in the relative % of income produced. So yes ebook costs should take into account the amount of money used to promote the title as a whole.
     
    Last edited: Feb 22, 2012
  10. goldhawk

    goldhawk aurea plectro

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    Well, the only reason for dealing with a company like Amazon is to get your name out there. And since the only promotion Amazon does is to put your book on the New list for its first three months, simply withdraw it after three months. To keep your name visible on Amazon, you need to release a new book every three months. That may be difficult but that's the way it is. Writers write; you have to be productive if you want to do this full time.
     
  11. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    I'm not sure why you think that Amazon does no promotion. They have all kinds of things going:

    • Kindle deal of the day
    • Top 100 under $3.99
    • Emails for featured books in a genre
    • Emails of "because you bought you might also like"
    • Special promotions such as the Summer Sale or the Big List Sale
    • Featured "editor picks"

    Beyond this there are intrinsic aspects of the site that gets your books noticed. Such as:

    • Bestsellers lists by genre
    • Books bought by those viewing this page
    • Reviews from readers that get books noticed
    • Reader forums for discussing books
    • Author pages with Bios, videos, books publsihed, tweet and blog feeds
    • Author cross sales lists
    • Book tagging
    • "like feautres"

    That's not to say that I don't think you should continue to write - and putting out more than one book is certainly a key to success but I get a great deal more exposure from Amazon than what you seem to indicate.
     
  12. goldhawk

    goldhawk aurea plectro

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    And what are you chances of getting on any of those lists? Unless you become a Name, it's pretty slime. And if you do become a Name, Amazon would be only one element of your promotions; people could still find your works without Amazon. Have realistic expectations. Thinking your books will make the Top 100 or Featured list will only happen to a select few. For most writers: don't deal with jerks unless you absolutely have to. Not only will it cause you problems, it will degrade your morale. And writing is hard enough without putting up with naysayers.
     
  13. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    I've been on every single one of those lists both as a self-published nobody and as a traditional author. In fact...now a days its harder for the "traditional" people to get on the list as they are dominated by the "small guy" self-published authors.
     
  14. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    This is my "current" list of those lists for my books...and I'm far from a "name"

    # 2 Hotest New Book Historical Fantasy: Heir of Novron(k)
    # 6 Hotest New Book Historical Fantasy: Heir of Novron(p)
    # 5 Hotest New Book Epic Fantasy: Heir of Novron(k)
    #15 Hotest New Book Epic Fantasy: Heir of Novron(p)
    #30 Hotest New Book Fantasy: Heir of Novron(k)
    #83 Hotest New Book Fantasy: Heir of Novron(p)
    #38 Hotest New Book Science Fiction & Fantasy: Heir of Novron(k)
    #12 Bestseller Book Historical Fantasy: Heir of Novron (k)
    #14 Bestseller Book Historical Fantasy: Theft of Swords (k)
    #16 Bestseller Book Historical Fantasy: Rise of Empire (k)
    #61 Bestseller Book Historical Fantasy: Heir of Novron (p)
    #65 Bestseller Book Historical Fantasy: Rise of Empire (p)
    #68 Bestseller Book Historical Fantasy: Theft of Swords (p)
    #39 Bestseller Book Epic Fantasy: Heir of Novron (k)
    #41 Bestseller Book Epic Fantasy: Theft of Swords (k)
    #44 Bestseller Book Epic Fantasy: Rise of Empire (k)
    # 2 Most Wished for Historical Fantasy Book: Theft of Swords (p)
    #10 Most Wished for Historical Fantasy Book: Heir of Novron (p)
    #14 Most Wished for Historical Fantasy Book: Rise of Empire (p)
    # 8 Most Wished for Epic Fantasy Book: Theft of Swords (p)
    #27 Most Wished for Epic Fantasy Book: Heir of Novron (p)
    #34 Most Wished for Epic Fantasy Book: Rise of Empire (p)
    #26 Most Wished for Fantasy Book: Theft of Swords (p)
    #97 Most Wished for Fantasy Book: Heir of Novron (p)
    #55 Most Wished for Scienc Fiction & Fantasy Book: Theft of Swords (p)
    #26 Most Wished for Historical Fantasy Book: Theft of Swords (p)
    #35 Most Wished for Historical Fantasy Book: Heir of Novron (p)
    #44 Most Wished for Historical Fantasy Book: Rise of Empire (p)
    #84 Most Wished for Epic Fantasy Book: Theft of Swords (p)
    #89 Most Wished for Epic Fantasy Book: Heir of Novron (p)
    # 3 Hotest New Kindle Historical Fantasy: Heir of Novron
    # 3 Hotest New Kindle Epic Fantasy: Heir of Novron
    #15 Hotest New Kindle Fantasy: Heir of Novron
    #10 Bestseller Kindle Historical Fantasy: Heir of Novron
    #12 Bestseller Kindle Historical Fantasy: Theft of Swords
    #13 Bestseller Kindle Historical Fantasy: Rise of Empire
    #26 Bestseller Kindle Epic Fantasy: Heir of Novron
    #28 Bestseller Kindle Epic Fantasy: Theft of Swords
    #30 Bestseller Kindle Epic Fantasy: Rise of Empire
    #82 Bestseller Kindle Fantasy: Heir of Novron
    #88 Bestseller Kindle Fantasy: Theft of Swords
    #94 Bestseller Kindle Fantasy: Rise of Empire
    #13 Top Rated Historical Fantasy: Theft of Swords
    #14 Top Rated Historical Fantasy: Heir of Novron
    #18 Top Rated Historical Fantasy: The Viscount and the Witch
    #59 Top Rated Historical Fantasy: Rise of Empire
    # 8 Top Rated Epic Fantasy: Percepliquis
    #24 Top Rated Epic Fantasy: Theft of Swords
    #28 Top Rated Epic Fantasy: Heir of Novron
    #32 Top Rated Epic Fantasy: The Viscount and the Witch
    #33 Top Rated Fantasy: Percepliquis
    #89 Top Rated Fantasy: Theft of Swords
     
  15. sullivan_riyria

    sullivan_riyria Creator of Worlds

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    Who are "the jerks" in the above? - Are you speaking about Amazon, or publishers? or both?
     
  16. Laer Carroll

    Laer Carroll LaerCarroll.com

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    Amazon is highly automated. It has to be, because they sell just about everything, from items costing a few dollars to ones costing several thousand dollars. Most of their sales are single items.

    Ebooks are a tiny part of the Amazon mercantile empire, a tempest in a teapot compared to the tornado of everything else. We authors are a big deal to us, but to Amazon we are little more than gnats. Ebooks only gets so much publicity because ereaders and tablets are neat new high-tech gadgets. Newspaper and newsblog reporters and readers get excited about such novelties.

    Paying of authors happens automatically. Humans get involved only once in (perhaps) 10,000 times. Glitches in payment are usually the fault of machines, not people. Though people are surely the source of some errors.

    I've only gotten started with Amazon's partner CreateSpace. I expect to finalize my first printed book by the end of this week, after which it will be available through Amazon. I don't know for sure yet, but I expect payment will be handled pretty much the same way as my ebooks.
    ___________________________________​
    Traditional publishers (including small and medium publishers) are almost the reverse. They are increasingly using computers and networking their offices and the service organizations they use such as printers and shippers. But progress in that area is turtle slow, even in the largest publishers who have the most to gain from automation and the most resources to push automation.

    Glitches in payment are mostly the fault of people. Some of it is the usual mistakes and laziness. But delaying of payments may also have elements of financial calculation. A payment kept in a bank (for instance) earns interest, which does not go to the author.

    That is on the publishers side. But most authors have agents, which introduces yet another source of delay of payments. And of theft, which does happen. Maybe it happens rarely (despite our usual authorial paranoia which says otherwise) but it does happen.

    Then there are book distributors and bookstores. These again introduce delay. And another source of error and theft.
    ___________________________________​
    Problems in both newer and older forms of publishing exist. I'm still too new to the publishing business to say whether one is better than the other.

    My systems engineering experience suggests that the answer is NEITHER. That both have their risks and their benefits. And that a writer who wants to be a pro needs to know them and guide their career accordingly.

    This makes forums such as this very valuable, and is why I read it daily.
     
  17. KatG

    KatG The Bony Hand of Death Staff Member

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    That's a contract. An Agreement is a contract. Look, I'm not saying it's not a worthwhile gamble. But the claim that you have complete control over your work on Amazon's platform is not true.

    -- They have the control, you don't.

    -- They can change the terms of the contract, you can't. That is legally vague enough to be able to include a claim/change of terms by Amazon that because you earlier agreed to be on their service, you are still by that agreement on their service, or that because you've wandered away from them (because they changed their minds about giving you 70% on your $2.99 book or decreed that you can't sell the book for $2.99 but must now sell it for 50 cents,) and you are now selling the book elsewhere at other sites for a lower price than previously on Amazon, they have the right to keep selling your book at a price of $0 or at a price equal to what you sell in other places. They can also, since they have no liability when there's an error, sell your book, keep the money, claim it was an error, refuse to give you any of the money and you do have little legal ability to sue them because you agreed they didn't have the liability. Well, you may not have agreed to it originally. They added that bit:

    They have the right to change any term at any time of the Agreement. That includes terms about you leaving their service. About your pricing. About what rights you're actually giving them access to. They have the right to make money off of you in any way they want from advertising to sales and not give you any of it. You said they could in your Terms of Service contract.

    And yes, if they did something you feel is aggregious, you could take them to court. That's what masses and masses of groups, publishers and authors were eventually able to do to Google, who didn't even have a contract with them. And most of the court cases, they lost. Amazon has billions of dollars. As Jim said,
    Amazon doesn't have much incentive right now to screw you over. That may change. It changed for small presses who were trying to do business with Amazon and relied on the service. I would have no qualms about self-pubbing something and placing it on the Kindle service. But I'd do so knowing what contract I was agreeing to and what I was gambling on. I don't think most of the self-pub authors do understand what they are agreeing to and what rights they are giving to Amazon with a blank check for Amazon to change the terms and take more.

    Sullivan:
    Your wife, like many people running a small press, is ignoring labor and production costs, and on-going, recurring costs of marketing and specialized accounting for e-books, and the scale of small list to big list and number of vendors involved, because she's running a small press concentrating on e-books where she's doing all or nearly all the work. This is a common problem, and you've pretty much just pulled the "assumption" numbers for the publishers you were playing with out of your hat, rather than have them based on fact. There are unquestionably overhead costs that publishers could reduce but the big publishers are essentially covering the costs of building the e-book infrastructure that the smaller presses then benefit from. Over time, costs are going down, as they did with print, but to make e-books in addition to print books for a still small part of the market requires regular personnel and production costs. And there are business factors that big publishers have to deal with that small presses don't that lead to things like advances, larger print runs, etc.

    When you entered into a contract with Orbit, you keep your ownership of the property, but you granted the license right of production to Orbit, partial rights to certain forms of production. Complaining that Orbit won't then let you have the right of production when you giving them that right on your behalf was the whole point of your license contract with them seems a bit confused. If you had entered into a contract with a small press who was not your wife, you would have also been giving that small press the right of production and have no control over it therewith because you gave that to the press. You do so, giving that right of production, in order to achieve whatever were your particular goals in partnering up with Orbit. The contract is for the term of copyright, small press or large, because the term of copyright is the amount of time you are authorized to be able to grant the right of production to anyone or any company. After that, the work becomes public domain and anyone can have the right of production of your work without the consent of you or your heirs and so the publisher can't retain the right of production past the time you can grant it.

    When you enter into a Terms of Service contract with Amazon -- and that's what you did -- you are granting them a partial right of electronic production. You are granting them the right to produce and distribute the e-book on the Kindle and Kindle systems. They control this right of electronic production, just like Orbit, but under the terms, they have no obligations to you whatsoever. You also granted them the right to set and change the terms of your agreement whenever they feel like it, including deciding not to let you sell your work on the Kindle or continue to do so. That Amazon lets you set the price, under certain terms they decide, and lets you do the work on a book cover, etc. doesn't mean they don't own that right of production. It's not an exclusive right, but they do have it and under far freer and better terms than Orbit got. (But Orbit got a wider range of right to production from you, at least unless Amazon tries to change their contract.)

    Your big problem with Orbit is not that they control production because you said that they could. It's that the out of print clauses of the contract, which allowed you to end the contract when Orbit was not exercising their right of production and license to sell and regain the right of production you gave them has now been thrown up in arms because of the wild west rights frontier of e-books. You are doing a deal during a transitional stage in which on-going negotiations large and small that will effect and adjust the out of print issue. That was a gamble you took by doing the contract with Orbit now. And Amazon is part of that transitional stage because they are sucking up electronic production rights, which was a large factor in the pricing model fights.

    And with Amazon, you took the gamble of giving them an open contract that gives them partial license to the right of electronic production in the manner in which they define it. In many ways, that's a bigger leap of faith because it's not very clearly delineated and subject to wide legal interpretation. And doing that lets you achieve other goals. So, as you are doing, you will be assessing your changing goals and negotiating for improvement of terms. (Although you'll have to wait for a long time for Amazon to feel like giving up the power they have.)

    Yeah, Harlequin is already in the doghouse for all sorts of non-legal stuff they are trying to pull. That doesn't mean that how book contracts with publishers work in general. Their ploy is to use their leverage with authors and attrition from non-response to try to renegotiate the electronic production terms. Which courts are unlikely to accept as an unsigned addendum. But Amazon doesn't have to bother with that, since they have an open agreement with you where they don't have to inform you of any changes even. Right now, again, it's not a problem because Amazon finds self-pub authors extremely useful. But across e-publishing, the terms of these distribution/e-pub deals are going to become more and more an issue of contention as the market opens up. Amazon has maximum leverage now; they know they won't always.

    I think a lot of the problem is that authors don't always understand what rights they own and what they are licensing to others in various deals. The article writer feels that this will contribute to a collapse of the self-pub market. If Amazon did decide to crack down or could maintain almost full control of the market, that might be possible, but that's highly unlikely to ever happen.
     
  18. Laer Carroll

    Laer Carroll LaerCarroll.com

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    A lot of the recent posts discuss the contracts used by online and by print publishers. But there's one facet of the author-publisher relationship which is more important than that. This is the relative sizes of the two parties to the contracts.

    Amazon is a multi-billion dollar business. Most authors have small incomes. It's very unlikely that we will be able to pursue any lawsuit against a company that size - much less win it.

    In the rare case where a writer wins a suit, the loser will likely simply appeal to a higher court. And if they lose that appeal, they likely will appeal to a yet higher court. Each appeal will take time, possibly years. The author may get ill, or die, or go bankrupt, or go through an emotionally devastating breakup or other crisis, and just give up on the lawsuit. Or their attorney may decide they are spending too much time and resources fighting the legal battles, and tell the author to find some other attorney.

    When is there a substantial chance that Amazon or a big traditional publisher will lose definitively and forever? When their opponent is also large and powerful. This could be a trade organization, or a state or federal agency. Or even several authors banding together for a group lawsuit - though that last has been increasingly made illegal by strongly pro-business politicians in the last few decades.

    So really, is all the discussion of the legalities really pertinent to the question of the future of the publishing industry?
     
  19. KatG

    KatG The Bony Hand of Death Staff Member

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    Absolutely, because it shapes the future of the publishing industry. Both publishers and Amazon have lost in court to class action suits or not gone to court but given in to united pressure. (Well, I'm not sure Amazon ever gives into pressure by anything but large corporations, but it's possible as they lose monopolies that they would.) How publishers issue royalty statements and make payments have been effected by these legal issues and negotiations about them. How much the royalties are, effecting what the author can make, have been effected by these legal issues and negotiations about them. Whether a company owns electronic rights and in what ways is an enormous issue to the future of e-publishing. Mike's deal with Orbit effects what happens to his livelihood and how he will proceed in the future, and his deal with Amazon also effects his livelihood and what he will be able to do in the future. The relationship between author entrepreneurs and companies that produce and sell is one long on-going contract negotiation. Individually, self-pubs don't have a lot of leverage if they choose to deal with Amazon. But collectively, they do. And the leading sellers among them have more leverage that can effect change for everyone on down. (It's one of the few areas where trickle down actually works.)

    Mike, who's been exceedingly generous here with his contractual terms, is in a transitional period in his career business-wise. He's navigating. And he's weighing the pros and cons of the gambles and agreements he has made. That's what authors are supposed to do -- find the arrangements that work best for them (which are not all the same,) and deal with the consequences of the arrangements they make. And they have to do this in an ever changing market where many changes occur because of contract negotiations by other authors. So it's complex and not static. Over the course of Mike's copyright, many things may change. His contract and terms of service agreement contract may be amended or legally interpreted differently from the current legal interpretation and the things he is concerned about may be resolved. And this will shape how he does business and the industry operates.
     
  20. goldhawk

    goldhawk aurea plectro

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    Which is why it's unfair. How would you feel about a retailer which gives a 10% discount to all Caucasians?

    In your country. In mine, the government pays for all class-action lawsuits.