Morning Roundup: IndieReader Discovery Awards and more

Will Summerhouse took first place in the 2014 IndieReader Discovery Awards in the fiction category for his book Orion Poe and the Lost Explorer.

IRDA-stciker

Kindle Daily Deal: First-in-Series Literature and Fiction (and others)

IndieReader Discovery Awards (GalleyCat)

Will Summerhouse took first place in the 2014 IndieReader Discovery Awards in the fiction category for his book Orion Poe and the Lost Explorer.

The Frustrations of Being an Independent Publisher or Why Amazon is Actually Saving Independent Publishing (FutureBook)

When there is an absolute stranglehold on buyers by the big five publishers it is difficult for independent publishers who scrape a living through Amazon to have much sympathy for their plight when they complain about an uneven playing ground.

Apple Introduces OSX Yosemite, a Major Visual Update Available Free to Everyone This Fall (GigaOM)

Apple announced the latest version of its desktop operating system, OS X Yosemite, at its annual WWDC conference

Competitors Use Hachette to Fight Amazon (Digital Book World)

Amazon’s contract dispute with Hachette has given some of the big retailer’s competitors an opportunity to make inroads with readers.

2 Comments on Morning Roundup: IndieReader Discovery Awards and more

  1. The Wall Street Journal has an excellent summary of the legal mess that publishing is in today:

    http://online.wsj.com/articles/gordon-crovitz-the-antitrust-book-boomerang-1401661151

    If that link hits a paywall, Google “The Antitrust Book Boomerang” to bypass it. (Handy with all paywalled WSJ stories).

    Here’s how it summarizes Amazon’s POV:

    ——
    The explanation is that Amazon likes dealing with publishers under rules it imported from physical bookstores, which include complex business terms such as those now being negotiated. Under its preferred “wholesale model,” retailers like Amazon, not publishers, set prices. Amazon negotiates different revenue splits with different publishers and “co-op” fees to promote particular books.
    ——

    That’s why I’ve been stressing that independent authors will lose if Hachette loses. The core battle is over how much Hachette pays Amazon to get special treatment for its ebooks. The more Amazon is able to get, the more heavily it’ll favor (though online display) those who cough up money. Since independent authors and small publishers can’t afford that, it’d be better by far if Amazon, unable to get those payments, turned its attention to selling everyone’s ebooks equally and simply making money on that sale. The problem with that, from Amazon’s perspective, it that it makes it much harder for Amazon to leverage its huge market share to crush competition.

    This is the description of Apple’s much cleaner business model:

    ——-
    When Apple launched the iPad to compete with Amazon’s Kindle, it made the business innovation of substituting the wholesale model with a simple revenue share with publishers—the “agency model.” Apple wanted to avoid exactly the kind of drawn-out negotiations in which Amazon and Hachette are now embroiled. It wanted publishers to control pricing so as to encourage product development in e-books. For apps and games, Apple lets developers set the price and takes a flat 30% of sales. Apple offered e-book publishers the same deal.
    ———-

    That’s a level playing field. As described by the WSJ, no money flows under the the table to Apple for making a Big Six title more visible on the iBookstore than those from Little Nobody. Everyone gets the same 30/70 split and Apple’s income is from that 30%.

    Apple’s primary financial incentive is to steer customers to books that sell well, whatever their source. That’s almost certainly why Apple works quite well with Smashwords, while Amazon doesn’t. Smashwords business model demands a simple, clear, direct contract. Amazon’s model doesn’t work because Smashwords stands in the way, making it impossible for Amazon to squeeze money out of authors.

    Whether that description of Apple is 100% true or not, I don’t know. Right now, J. K. Rowlings’ (as Robert Galbrith) The Silkworm heads iBooks app list of “Coming Soon” and most of the others seem to be from well established authors. Is that list determined by some sort of payment small enough publishers don’t balk at it, by personal contact, between Apple staff and publisher sales team, or by Apple’s editorial judgment that the books listed are simply likely to do well? That I don’t know.

    What is apparently true is that there’s no aggressive game being played, where Apple is demanding a lot for special treatment and Hachette is refusing. If I were to guess, to the extent that money will buy placement on that iBookstore list, it’s money the publisher is spending in outside advertising, money that will drive readers to the iBookstore. It’s not money given to Apple.

    Here is where the present trouble comes:

    ——–
    But instead of letting the market decide whether the wholesale model or agency model should prevail, Judge Denise Cote dictated the outcome by ruling against Apple. She acknowledged that the agency model is common in many industries but insisted publishers be subject to Amazon’s wholesale approach anyway, ordering book publishers to negotiate new deals with Amazon, with Hachette coming up first.

    Amazon is happy to use its court-mandated leverage to re-establish control over pricing and the retailer-publisher relationship…. Amazon reportedly wants a larger revenue share for discounted e-books and larger payments from publishers for promotion.
    ———

    Note the “larger revenue share for discounted e-books and larger payments from publishers for promotions.”

    * The first will harm independent authors because, if Amazon can squeeze Hachette to accept lower royalties, those same lower royalties (or worse) will be extended to independent authors, much like Amazon affiliate Audible recently slashed royalties to audiobooks from independent authors.

    * The second hurts independent authors and small publishers by exclusion. If Amazon can extract large promotional payments from major publishers, then virtually the entire visual bandwidth and customer search results of Amazon’s ebook sales will be taken up servicing that lucrative revenue source.

    Hachette will have to pay a lot, but it will get the online equivalent of a huge display at the entrance to a bookstore. Independent authors and small publishers will find themselves, without even being asked, stuck with the equivalent of a small, dimply lit row of shelves hidden behind a staircase. In fact, it’ll be to Amazon advantage to dim those lights and hide those shelves even more than it does now. The greater the contrast between paid promotion and unpaid, the more money Amazon can earn.

    That, in a nutshell is the situation we are in.

  2. See that Wall Street Journal article and raise you another one.

    http://online.wsj.com/articles/u-s-goes-back-to-publishers-on-prices-1401752432

    But thanks for the tip. I might just cover both pieces in a post later on.

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