July 2014

Amazon v Hachette: The enemy of your enemy is not your friend

by Suw on July 30, 2014

This was going to be a comment on Damien Walter’s blog post about Amazon’s recent statement on their row with Hachette, but it seems to have metastasised so now it’s a blog post. It’s a bit rough and ready because I am so behind on other work that I can’t devote as much time as I’d like, but here we go:

Damian writes:

It’s worth noting here that ebook prices now behave much more like the dynamics of crowd-funding than traditional book pricing. Your product is essentially unlimited so you price at the point that produces the highest volume.

No supplier should price anything in order to get highest volume, they should price to get the highest revenue. If you price at 99p and sell 10,000 that’s a revenue of £9,900. But if you price at 2.99 and sell 5,000, that’s £14,950. Books aren’t entirely fungible – whilst there’s superficial interchangeability between books, mostly people want a particular book either from a particular author or because they particularly like the look of it.

Amazon want to control prices, and they say of this dispute with Hachette:

A key objective is lower e-book prices. 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 be and should be less expensive.

But because books aren’t fungible, pricing shouldn’t be capped, even for ebooks (because the price of ebooks is only nil if you wilfully ignore all the production costs associated with producing the content in the first place, and if you don’t pay anyone to create the file that is the ebook, and we all know how crap ebooks get when they are simply converted without human oversight). If there’s a keen but limited market of 1,000 that is willing to buy at £14.99 then the revenue of that price point is more than at £2.99 or 99p – it’s £14,990.

Amazon is being very disingenuous when it says:

It’s also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less. 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 may well be true in general, but it will not be true in all cases because demand for all books is not equal. It may be that some books have a market that is small, but willing and able to pay more. Forcing a pay cap on publishers means that they are no longer going to be able to service a small but affluent markets. This is going to be especially true for the sorts of books that get bought for business or development reasons, where the customer is much less price sensitive because either the money isn’t coming out of their own pocket and/or they are looking to make a return on their investment in some way, as opposed to books bought only for the pleasure they bring.

You simply cannot take statistics that apply to a population, in this case the population is all the books that Amazon sells, and then apply it to a specific book, because there will always be outliers, there will always be exceptions, and there has to be enough flexibility in any system to accommodate those exceptions. Capping the price of books artificially reduces publisher’s options and makes it less likely that they will consider serving niche markets where the audience is small.

Amazon do say that they believe that there “will be legitimate reasons for a small number of specialized titles to be above $9.99”, but who will get to decide which books are to be deemed specialised? Amazon doesn’t say, but the implications are that it will be Amazon’s call, as it is Amazon who are trying to dictate prices. That would be unacceptible.

Furthermore, even if publishers are overpricing ebooks, that is their right in a free market. We may disagree with how ebooks of novels are priced, we may think that they are often too expensive, that’s our prerogative. But it is the publisher’s prerogative to price high if they want, even if it’s a mistake. They have the right to fuck it up if they want to, and it is not Amazon’s place to stop them; it is our place to stop them by refusing to buy books that are too expensive.

It is a shame that publishers don’t seem to yet understand how to operate in a world of abundant content but scarce attention, but it is their choice. We can only try to help them understand, we cannot force or coerce them to behave in a way that we want.
And neither can or should Amazon.

Amazon goes on to describe how it thinks the revenue from any given book should be split up:

So, at $9.99, the total pie is bigger – how does Amazon propose to share that revenue pie? We believe 35% should go to the author, 35% to the publisher and 30% to Amazon. Is 30% reasonable? Yes. In fact, the 30% share of total revenue is what Hachette forced us to take in 2010 when they illegally colluded with their competitors to raise e-book prices. We had no problem with the 30% — we did have a big problem with the price increases.

It is no business of Amazon’s how publishers split their revenue with authors. There’s certainly a case for giving authors a bigger slice of the pie, of course, and I suspect there are a lot of authors out there who would agree with this. But it’s not Amazon’s argument to have. It’s not Amazon’s place to define the terms of the agreement between an author and their publisher. All Amazon is doing here is trying to appeal to authors, trying to turn them against publishers, which is also why it uses language such as “forced” and “illegally colluded” – it’s a way of framing the debate so that publishers look like evil overlords and Amazon look like knights on white chargers. It’s playing on author’s emotions as a way to distract from the inappropriate nature of its comments on author royalties.

Let me just say it again, though, to be absolutely clear: It is not for Amazon to dictate the terms of the contract between author and publisher.

Damien, perhaps spurred on by the above paragraph from Amazon, says:

This begs the question, if Amazon are fighting for higher author royalties and more profits overall, what are Hachette fighting for and why does anyone support them? It’s clear, Hachette are fighting for their existing and increasingly outmoded business model. They’re fighting for stasis in the face of inevitable change. Worst of all, they are fighting against changes that are vastly to the benefit of writers. I still say this is a fight authors do best not to take sides in. But if you are going to join the battle, you’re a fool not to see Amazon as your ally.

Amazon are not fighting for higher author royalties for any reason other than to turn authors against publishers. There is no altruism at work here, Amazon doesn’t give a flying fuck about authors, as born out by their unwillingness to deal with fake reviews on their site and bullying on Goodreads. They don’t ever care about self-published authors, as shown by their shitty tools, lack of customer service, and frankly sometimes bizarre behaviour that goes unexplained and without apology.

Amazon care about Amazon. That’s fine, but don’t believe that Amazon are anyone’s ally. Amazon will shoot authors in the back if it ever becomes profitable to do so.

Hachette are fighting for survival, but also for their own authors. If they get a smaller chunk of the pie from Amazon, then their income is squeezed and they’re going to have less money to spend on things like marketing, editing, advances, etc. for the authors that they already have on their books. Those authors will be in a worse position, as will any authors that Hachette might take on in future.

Whilst it is true that publishers are not perfect, and sometimes they act like total cockwombles, there are plenty of people who work for publishers who genuinely care about their authors, who genuinely want to put out great books that readers love, who want happy, well paid authors. It is a fallacy to believe that all publishers are evil, or that they are all corrupt, or all stupid, or working against their authors. As William Gibson so famously said, the future is already here, it’s just not evenly distributed yet, and that’s as true of publishing as anything else.

I do not believe that the changes Amazon wants are to the benefit of writers. I do not see Amazon as my ally. I see them for what they are: A self-interested corporation that wants to exert as much control over their suppliers as possible. That’s it. They aren’t saviours, they aren’t allies, they aren’t white knights. They want to control as much as possible in order to make as much money as possible, whilst not paying taxes and treating their workers like shit.

If I were Hachette, I’d be thinking about moving away from any sort of percentage-based deal with Amazon and towards a more sensible retail-wholesale agreement. “We sell you these many books at £x, and you can sell them at whatever price point you want.” Hachette would have income predictability, authors would know how much they’re getting, and Amazon could still discount as much as they like. It’d be no skin off Hachette’s nose if Amazon decided to take a bath on a popular title.

Whatever Hachette is thinking, one thing is very, very clear: Amazon are fighting a propaganda battle, working hard to alienate authors and demonise publishers. Taken with their other practices, this shows just how untrustworthy they are. So this is one occasion where I would strongly counsel those who loathe publishers that the enemy of your enemy is not your friend.

UPDATE 31 July: Interesting post from Mike Shatzkin on this.

UPDATE 2 & 3, 31 July: Steve Mosby examines the implications of Amazon’s claim that “For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99.” Well worth a read, as is John Scalzi’s post covering similar ground.

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Strange noises in the chimney

by Suw on July 15, 2014

I’ve been in the US for two weeks now, and I’m starting to feel settled in. Our house is lovely, if still rather empty and echoey as our furniture is still in the Port of New York, going through customs and, eventually, making its way here. We have a couple of chairs, and yesterday picked up a table at a garage sale, but the house is mostly empty at the moment.

There’s a lovely fireplace in the lounge, and a couple of days ago we went to light the fire. It was a bit cool that evening, and we thought a fire would be cosy and make the place seem a bit more homely. Just above the fire grate, in the chimney, there is a dampener which shuts off the chimney, and which you have to open if you want to set a fire. Kevin did, and there was a very odd noise coming out of the chimney:

It turns out that we have a nest of chimney swifts in residence. According to what I’ve read, they become audible at about two weeks, and will fledge in another two. They are now very clearly audible even with the dampener closed. When the parents return with food, you hear a brief drumming sound as they claps their wings to their body at speed, and then the chimney erupts in enthusiastic chirping. This happens frequently throughout the day and although Grabbity and Mewton were perplexed at first, they’ve now decided it’s just background noise.

(I did try to record the sounds of our swifts specifically, and my phone did take a hit of bird poop in the process, but the resulting video was too quiet to be useful. I will try again tomorrow.)

Chimney swifts are classed as ‘near threatened’, possibly due to a decline in the insect population because of pesticide use and the loss of habitat. Chimney swifts used to nest in hollow trees, but when humans started cutting down trees and building houses, they shifted to chimneys instead. Many people now cap their chimneys to prevent animals like the swifts from gaining access. Ours obviously hasn’t been capped and, now we know a bit more about these delightful birds, we won’t be adding a cap in the winter.

Migrating birds are protected in the US, so we wouldn’t be allowed to disturb them whilst nesting or roosting even if we wanted to, but they are so cute and the sounds so adorable that I’m happy to share our home with them. The only real adjustments we’ll need to make is to sweep our chimney at the end of the season when they migrate back to Peru, to get rid of the nesting debris and prevent potential chimney fires, and then again in mid-March to make sure that the chimney is clear of creosotes and other deposits from our winter fires.

I expected some new and different experiences when I moved to America, but I can’t say that I expected to share my house with chimney swifts!

UPDATE: I managed to get some decent video of the swifts. Watch full screen and in HD if you can. The fun starts around 00:20.

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Amazon’s offers are pure propaganda

by Suw on July 8, 2014

In the long-running dispute between Amazon and Hachette over their terms of trade, Amazon has used its power over Hachette’s book sales to hurt authors and publisher alike. Amazon has removed pre-order buttons from Hachette books, de-stocked so that some titles appear to be unavailable, suggested to Amazon users that they buy alternative books from other publishers that are similar (and cheaper), and told buyers to go elsewhere if they can’t find the Hachette books they want.

These sanctions are designed purely to strong-arm Hachette in to agreeing the terms that Amazon wants, but Hachette are resisting even though it’s not just the publisher that’s hurting from lost sales, but also authors, especially those with books newly released or due out soon. Debut authors may be hurt particularly hard if their book’s early sales tank due to lack of visibility or availability on Amazon, where a large majority of purchases are made.

Amazon then suggested a slush fund for Hachette’s authors affected financially by Amazon’s sanctions against the publisher. Hachette declined that “offer”. So now Amazon has floated the idea that it and Hachette both forego their usual cut of sales and instead give 100% to the authors. Hachette has again declined, saying: 

“Amazon has just sent us a brief proposal. We invite Amazon to withdraw the sanctions they have unilaterally imposed, and we will continue to negotiate in good faith and with the hope of a swift conclusion […] We believe that the best outcome for the writers we publish is a contract with Amazon that brings genuine marketing benefits and whose terms allow Hachette to continue to invest in writers, marketing, and innovation. We look forward to resolving this dispute soon and to the benefit of the writers who have trusted their books to us.”

Amazon’s offers are nothing more than propaganda. Amazon decided to punish Hachette and its authors by taking actions that it knew would hurt sales, and it decided to do that as a negotiating tactic. Both the slush fund and the royalty offer are no more than sops to appease authors and persuade readers that Amazon are the good guys really and that it’s Hachette that’s being mean and intransigent. That’s utter bullshit. 

Contract negotiations do not require Amazon to impose sanctions on its suppliers. It is perfectly capable of running its shopfront normally whilst negotiations are ongoing, which would result in no authors getting hammered, and no readers being told to go elsewhere. Of course, then Amazon wouldn’t then have as much leverage, which is why they’re doing it in the first place. 

Hachette is absolutely right to reject Amazon’s disingenuous offers: Agreeing would imply that Amazon is in the right and Hachette is the aggressor which is simply not the case. 

If Amazon actually cares about Hachette’s authors and whether they are losing money, it has a very, very simple remedy: Resume normal service, and don’t impose sanctions again in future. It’s easy, and there’s no need to change any royalty rates or set up slush funds (or figure out how to fairly apportion that money, a question that I suspect is much more complicated than it might seem).

So try implementing normality within 72 hours, Amazon. You know you can.  

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Loving an alien, part 2

by Suw on July 2, 2014

Read Part 1. Also, please note that immigration processes vary from country to country, and in the UK they vary enormously over time as the Government thinks up new ways to torment immigrants. The below advice should not be thought of as comprehensive, nor always applicable to your personal situation, but is based on my experience of UK and US immigration processes, for whatever that’s worth. If in doubt, see an immigration lawyer.  

When I was 16, I probably would have laughed in your face if you’d said that I’d marry. And an American, to boot! You’re ‘avin’ a larf, mate. And even if I had believed you, it wouldn’t have done me any good without the advice I am about to give you.

If you have fallen in love with an alien, if an alien has fallen in love with you, if you’re even flirting with a foreigner or considering going on holiday or working abroad, then there are are a few little things you should do, right now, before they become necessary. This may seem silly, but trust me, if you ever need this information you’ll be very, very glad that you spent a little time preparing.

1. Make a list of everywhere you’ve ever lived

Literally, everywhere. Even those three month stints you spent at home in between years at university. In order to fill in some immigration forms, you need an unbroken record of everywhere you have ‘established a residence’ since you were 16, which for many people means ‘since forever’. It’s a tedious job, but start now and keep the document up to date and when you move house.

It took me hours on Google Maps and on the phone with my parents to reconstruct my residential history going back to, eventually, 1976. Luckily, I’d recently spent time on Google Maps finding the house I’d lived in back in Sydney, Australia, when I was 18, so that shaved about an hour off the process. But there was still a lot of “Do you have the address for that place with the bonkers landlord?”, though given that the majority of my landlords have been either bonkers or total assholes that didn’t narrow it down much. Remembering the walks home from the tube station helped too, but it was a tremendous stress at a time when I really didn’t need any more of that particular evil.

You’ll need the date (at least month and year) you moved in and moved out, and the full address.

2. Police certificates

Some visas require a police certificate for every country you’ve lived in for more than a year, no matter how long ago, and for any UK address you’ve lived in during the previous X years. It’s an easy process in the UK, but do not put it off once you get to that stage because it can take time, and the longer you put it off the more you delay your own visa.

If you have ever lived in another country for more than a year, start researching now how to get the appropriate document so that when the issue comes up you know what to do. The particulars of the process may change in the intervening years, but the basics won’t.

I only found out about the requirement for a police certificate for other countries late on in the visa process, and had I spent another three months in Australia, I would have had to get a certificate from them. That could have delayed my visa for months, which would really have piled on the stress.

3. Make a list of everywhere you’ve ever travelled

When Kevin had to do this, we spent a long time with his passports and calendar listing everywhere he’s been for the last ten years. That was relatively easy, if tedious, because an American travelling in Europe gets a stamp in their passport every time they enter a country, and usually when they leave too. (For some bizarre reason, the UK doesn’t do exit stamps.)

For me, it would have been a disaster if I wasn’t so zealous about putting things in my calendar, as a lot of my travel was within the EU, meaning that I don’t get any stamps in my passport at all. But with my calendar and my propensity for booking everything online and keeping electronic copies of tickets, I could draw up that list.

You’ll need the departure and return dates, plus city and country. Make a note of which flights are overnight – I tend to count duration in nights not days, which makes it easier to deal with nights spent in the air and the crossing of the date line (not that I’ve ever done that, mind!).

4. Check your vaccination record

Some countries require you to be vaccinated against specific diseases, so it’s a good idea to make sure that your medical records are up to date with your childhood jabs. You can get a print out of your vaccination history to give to the medical examiner.

You may need to get additional vaccinations in order to complete the immigration process: I had to have an MMR jab because I hadn’t had a mumps vaccination as a child (it didn’t exist then). As an adult you can get MMR free on the NHS, though I’ve heard that some GP surgeries are reluctant to give it. Don’t take no for an answer!

5. Check your medical records

Some countries require you to tell them your medical history, which sounds like a trivially easy thing right up until the point where you’re in the middle of the medical and being grilled about events that were so long ago that you’re a bit hazy on the details.

In the UK, you have the right to see your medical records and it should cost no more than £10. You are “entitled to receive a response no later than 40 days after your application is received and any relevant fee has been paid”, so start this application sooner rather than later. This is especially important if you have any history of mental illness, including depression, at all, because you could be asked quite detailed questions about what happened, when, and what medication you were given, if any. If you know exactly what is in your medical records, then you can be much more accurate in your replies to questions.

Be aware that, depending on the country’s requirements, if you have any history of mental illness, including depression, you may need to get a letter from your GP confirming that what you say is true. That can add a month or more on to the process, depending on how efficient your GP is. Again, do not delay talking to your GP if you run into this problem, as the sooner you ask them, the sooner your letter will get to the head of the queue.

At my GP’s, the process was that the GP writing the letter rang me up, asked for further information about when my brief period of depression was, read out what the records said (very, very little, as it turned out), and then wrote the letter. When it was ready I picked it up, read it through and had the opportunity to discuss it with the GP if I had wanted to, so they didn’t communicate directly with the embassy medical panel. This was a huge reassurance, because it was very stressful not knowing either what my medical record said (I didn’t check first) and not knowing what my GP would say.

6. Get your household bills in joint names, and keep them all

For Kevin’s Indefinite Leave to Remain in the UK we needed to prove that we had a legitimate relationship, not a marriage of convenience, and to do that the government wanted us to produce six utility bills in both our names from the previous two years. What wasn’t in the guidance was that they were expecting those bills to be evenly spread out over those two years. Our happened to come in three clusters, which they said wasn’t good enough.

As I said in my last post about immigration, their logic is just insane. Do they really believe that a couple would move in together, get joint bills then split up for 10 months before moving in together again to get more bills, then split up, and then do it all again? Seriously? On what planet does that happen? Especially as we had at that point been married a while. It’s just mindboggling that people would think like that.

But, we dealt with that bit of jobsworthing by adhering to the next rule, and it is a rule that you should live by no matter what sort of visa you are applying for, no matter what country:

7. Over-document

When the immigration official asked for more bills, Kevin whipped out a sheaf of papers about half an inch thick, and the objection to the timing of our bills magically evaporated. We had been advised to over-document, and it was advice we were happy that we followed.

In short, document everything, and keep everything. Get as many bills and other official proofs of your relationship as possible. Every time you get a relevant email, or fill in a form online, keep a print copy. Two copies. Make photocopies of all your official documents. If you have any phone conversations (although I have not spoken to any officials on the phone for my visa), make detailed notes including date and time of call.

It’s also a good idea to log every action you take, if only for your own peace of mind. Note when you submit forms, when you send emails, when you get documents through the post. The visa process takes ages, but it feels as if it takes aeons. It is good to be able to look at your log and realise that it was only last week that you submitted that form, not last month, and so the fact that you’ve not heard anything is not a bad sign.

Non-EU immigration is very, very hard work. If you can afford a specialise immigration lawyer, then that’s certainly a help, but many people can’t. The rhetoric of the media, especially in the UK, would have most people believe that all you need to do is turn up and bingo, it’s all good. But that’s not true. There are a lot of forms to fill, a lot of money to pay over, a lot of tedious information gathering and underneath it all the lurking suspicion that immigration officials can be capricious and that your application may fail for reasons entirely opaque to you.

If you are in the process of, or about start, any immigration process, then good luck. And if you’ve been through it, what do you wish you’d known before you started?

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